Samsung Electronics CEO Announces Strategic Deals to Boost Growth Amid Challenges

Company Targets Major Mergers and Acquisitions in 2025 to Regain Competitive Edge

Samsung Electronics, South Korea's leading tech conglomerate, has revealed plans to pursue significant mergers and acquisitions in 2025 to reignite growth, as detailed during its latest shareholders' meeting in Suwon, South Korea. Facing mounting pressure from investors over disappointing stock performance and a failure to capitalize on the artificial intelligence boom, the company aims to reclaim its position as a global semiconductor and technology leader. Co-CEO Han Jong-hee emphasized that these "meaningful" deals are critical to overcoming economic uncertainties and addressing shareholder concerns about Samsung's stagnant growth trajectory. This strategic shift comes after a tough year marked by weak earnings, declining share prices, and a notable lag behind competitors in key markets like high bandwidth memory chips and contract chip manufacturing.

The announcement follows a turbulent period for Samsung Electronics, which saw its stock plummet by nearly a third in 2024, hitting a four-year low in November. Shareholders voiced frustration over the company's inability to keep pace with rivals such as SK Hynix, which saw a 26% share price increase over the same timeframe, and TSMC, a dominant player in contract chip production. Samsung's struggles stem from its delayed response to market trends, particularly in the high bandwidth memory (HBM) chip sector, a cornerstone of AI-driven technologies. Co-CEO Jun Young-hyun, who oversees the semiconductor division, admitted to shareholders that the company misjudged market shifts, resulting in missed opportunities in the early AI boom. He pledged that 2025 would mark a turning point, with a renewed focus on restoring Samsung's "fundamental competitiveness" in semiconductors and beyond.

Samsung's leadership is under scrutiny as the company grapples with broader challenges, including a loss of market share in smartphones to Apple and Chinese manufacturers. The semiconductor business, once a stronghold, has weakened as SK Hynix surged ahead in supplying HBM chips to AI giants like Nvidia. Adding to the complexity, Samsung faces significant headwinds from U.S. restrictions on high-end chip exports to China, a vital market bolstered by Chinese firms' stockpiling efforts. Han Jong-hee addressed these geopolitical pressures, noting that Samsung would leverage its global supply chain and manufacturing capabilities to adapt to potential tariffs under the Trump administration while exploring investment opportunities in the United States. This flexibility is crucial as the U.S. reviews chip projects tied to a 2022 law aimed at boosting domestic semiconductor production, where Samsung is among the key beneficiaries alongside Intel, TSMC, Micron, and SK Hynix.

Financially, Samsung Electronics remains South Korea's most valuable company, boasting a market capitalization of $235 billion, representing 16% of the nation's main stock exchange. Nearly 40% of South Korean stock investors hold Samsung shares, amplifying the stakes of its recovery efforts. In November 2024, the company launched a $7.2 billion share buyback program to bolster investor confidence, and on the day of the shareholders' meeting, its stock rose 2.3%, outpacing the KOSPI index's 0.9% gain. However, the road ahead remains fraught with obstacles. Han Jong-hee cautioned that 2025 would be challenging due to economic policy uncertainties in major markets, while regulatory hurdles and national interests could complicate semiconductor mergers and acquisitions. Despite these barriers, he stressed Samsung's determination to deliver tangible outcomes through its deal-making strategy.

Beyond acquisitions, Samsung is exploring internal reforms to address shareholder demands for better stock performance. The company introduced a stock-based performance system for executives in 2024 and is considering extending it to employees in 2026 as part of a broader review of its stock price dynamics. This move signals a cultural shift aimed at aligning workforce incentives with shareholder value, a response to criticisms from investors like 65-year-old shareholder Lee, who lamented the stock's dismal run in 2024 and considered shifting investments to U.S. markets. Internally, Chairman Jay Y. Lee has acknowledged a troubling trend, stating in a message to executives that Samsung's technological edge has eroded across its businesses, with efforts focused on maintaining the status quo rather than driving innovation.

The emphasis on mergers and acquisitions reflects a proactive stance to reverse these setbacks. Industry analysts speculate that Samsung Electronics may target companies with advanced semiconductor technologies, particularly in the HBM chip space, to close the gap with SK Hynix and meet surging AI demand. Potential U.S.-based deals could also strengthen Samsung's position amid shifting trade policies, leveraging its existing manufacturing footprint in states like Texas, where it has secured subsidies under the 2022 U.S. semiconductor initiative. Han Jong-hee's reference to producing "tangible results" suggests a sense of urgency, as Samsung seeks to rebuild investor trust and reclaim its leadership in a fiercely competitive tech landscape.

Samsung's challenges extend beyond semiconductors. In the smartphone market, it has ceded ground to Apple’s premium offerings and cost-effective Chinese brands, necessitating a multifaceted growth strategy. The company's ability to execute impactful mergers and acquisitions in 2025 will hinge on navigating regulatory complexities, securing strategic assets, and adapting to global economic shifts. For shareholders, the promise of a revitalized Samsung Electronics offers hope, but the stakes are high as the company balances immediate financial pressures with long-term technological ambitions. With its vast resources and market influence, Samsung remains a pivotal player, and its upcoming moves could reshape the global tech and semiconductor industries.