Samsung Electronics is facing significant setbacks. After reaching a high in July, Samsung’s shares have plunged by 32%, wiping out around R2.2 trillion ($122 billion) in market value. Concerns have arisen as the company falls behind South Korean rival SK Hynix in AI memory production and lags Taiwan’s TSMC in outsourced chip manufacturing. This has led many foreign investors, including Pictet Asset Management and Janus Henderson Investors, to offload R192 billion worth of shares since late July.
Samsung’s challenges are compounded by delays in its new HBM chips, a key technology for AI, as SK Hynix and US-based Micron ramp up their production. Despite reassurances from management, Samsung’s costly efforts to catch up in the foundry business have yet to yield results, forcing job cuts to manage costs.
The company’s AI setbacks contrast sharply with the success of Nvidia and TSMC, who have seen large gains in market value. Samsung will address its third-quarter performance in an upcoming call, where investors are hoping for signs of strategic changes or leadership updates. CEO Jay Y Lee has cleared recent legal troubles, but investors remain skeptical, pushing Samsung shares to a near-record low.