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Concerns grow over Samsung Electronics as rivals advance in chips, smartphones, home appliances

An employee walks in front of Samsung Electronics’ office building in Seoul, Monday. Yonhap

By Lee Min-hyung

Samsung Electronics is anxious over the growing risk of losing its once-dominant market position in its key businesses — memory chips, smartphones and even home appliances — as its rivals are rapidly closing the technology gaps and expanding their market shares, according to industry officials and data, Monday.

The concerns of Samsung employees are deepening after the company reported a drastic fall of 84.86 percent in its operating profit last year. This marked the first time since 2008 that the firm generated less than 7 trillion won ($5.25 billion) in annual operating profit. Samsung was hit hard by a drastic earnings shock in its cash-cow semiconductor business, which reported losses of around 15 trillion won in 2023.

But of particular concern is that the company is losing its reputation as a brand that exuded dominant leadership in technological prowess, as SK hynix, which was once considered a runner-up in the memory chip business, is on track to threaten Samsung’s stronghold of high-bandwidth memory (HBM) chips. SK hynix is rapidly increasing its DRAM market share through its exclusive HBM supply deal with Nvidia.

Nvidia is de facto a monopolistic market player in the artificial intelligence (AI) chip industry. The surging demand for chips for AI servers has enabled SK hynix to narrow its DRAM market share with Samsung Electronics. According to data from market tracker Omdia, Samsung Electronics attained a DRAM market share of 39.4 percent in the third quarter of last year, and SK hynix is following closely with a share of 35 percent. This marked the first time that the gap between the two firms has been reduced to below 5 percentage points.

“There is an internal concern as to the falling reputation of Samsung Electronics’ chip business,” an official from the company said on condition of anonymity. “Samsung Electronics was an unmatched leader in the memory chip business about a decade ago, but this appears not to be the case. Few would refute that Samsung Electronics drove the tech paradigm in the area, but this looks not to be the case now amid the rapid rise of competitors.”

Samsung Electronics’ chip factory in Hwaseong, Gyeonggi Province / Courtesy of Samsung Electronics

“Samsung Electronics used to lead the market with its technological excellence, and other players — such as SK hynix and Micron — ended up following after Samsung,” the official said. “But the trend has changed now. One thing clear is that Samsung Electronics is no longer a dominant market player in terms of technology, even if its influence is still massive across the global chip industry.”

Samsung is facing a triple whammy in its other businesses, with its archrivals posing growing threats. The firm’s visual display and home appliance unit generated an operating profit of 1.25 trillion won last year, down 7.4 percent from the previous year.

This fell behind that of LG Electronics, which saw its home appliance business chalk up an operating profit of 2 trillion won, up 76 percent during the same period.

According to data from market intelligence firm IDC, Samsung also lost its leadership in terms of smartphone shipments last year to Apple for the first time in 13 years since 2010. Apple’s annual shipments in 2013 reached 234.6 million, while those of Samsung came in at 226.6 million.


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