SUWON, South Korea :Samsung Electronics said on Wednesday it is looking at major deals to drive growth as it faced tough questions from shareholders after its failure to ride an artificial intelligence boom made it one of the worst-performing tech stocks last year.
The South Korean firm has been suffering from weak earnings and sagging share prices in recent quarters after falling behind rivals in advanced memory chips and contract chip manufacturing, which have enjoyed strong demand from AI projects.
Shareholders slammed management for poor stock performance and called for measures to revive stock prices at the meeting.
“First and foremost, I sincerely apologise for the recent stock performance not meeting your expectations. Over the past year, our company failed to adequately respond to the rapidly evolving AI semiconductor market,” Samsung co-CEO Han Jong-hee said at the meeting.
Samsung, which has introduced a stock-based performance system to executives last year, is considering expanding the scheme to employees next year, as part of efforts to review its stock prices, Han said.
Samsung Electronics shares were trading up 2.6 per cent, compared with the benchmark KOSPI’s 1 per cent rise as of 9:16 a.m. (0116 GMT).
“The stock performance has been disappointing,” a 65-year old shareholder who only gave his family name, Lee, told Reuters ahead of the meeting.
“Last year, the stock price was so bad that I even considered investing in U.S. stocks instead,” he said.
In internal meetings, Samsung has acknowledged it has lost ground. This is particularly true in semiconductors, where it lags SK Hynix in high bandwidth memory (HBM) chips that Nvidia and others rely on for AI graphic processing units.
“Our technological edge has been compromised across all our businesses,” said a transcript of a message from Chairman Jay Y. Lee given to an internal executive seminar that was seen by Reuters. “It’s hard to see that efforts are being made to drive big innovation or tackle new challenges. There are only efforts to maintain a status quo rather than shaking things up.”
Han told investors that 2025 would be a difficult year because of uncertainties surrounding economic policies in major economies and that Samsung would pursue “meaningful” mergers and acquisitions and try to produce tangible achievements.
Han said the company will flexibly respond to Trump’s tariffs with its global supply chain and manufacturing footprints, while looking at options for U.S. investments.
Shares in Samsung tumbled by nearly a third last year while those of SK Hynix climbed 26 per cent. In recent years, Samsung has also lost market share to TSMC in contract chip manufacturing and to Apple and Chinese rivals in smartphones.
Samsung launched a share buyback plan worth 10 trillion won ($7.2 billion) in November after its stock plunged to more than four-year lows. Its shares have gained 7 per cent since then.
Samsung is South Korea’s most valuable company, with its market capitalisation of $235 billion accounting for 16 per cent of the total value of the country’s main bourse. Nearly 40 per cent of investors in South Korean stocks own Samsung shares, according to market data.
