Last week, Samsung Electronics released its earnings estimate for the third quarter, which fell short of market expectations, leading Vice Chairman Han Jong-hee, who heads the Device Solutions division, to issue a rare public apology. Despite these efforts to address concerns, Samsung’s stock price continued to slide, dropping by 1.2% on October 8th.
The preliminary figures revealed that Samsung’s operating profits for Q3 would rise approximately 274% year-over-year, reaching around 9.1 trillion won. However, this still lagged behind analysts’ expectations of 10.3 trillion won. The decline in chip profits raised concerns due to one-time costs, currency fluctuations, and inventory adjustments from customers. Furthermore, competition from Chinese firms in the supply of mature process chips has also played a role.
In light of these challenges, Samsung Electronics made a statement aimed at customers, investors, and employees. Here’s the translation of that statement:
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Dear valued customers, investors, and employees of Samsung Electronics,
We want to begin this message with an apology from our management team.
Our recent performance has not lived up to market expectations, raising concerns about our technological competitiveness and future outlook. There has been significant discussion about a crisis at Samsung, and our leadership takes full responsibility for these challenges.
However, Samsung has a strong history of turning crises into opportunities through innovation and resilience. We are committed to taking the difficulties we face and transforming them into a stepping stone for future success. Our management team will lead the charge in navigating through this crisis.
Most importantly, we are dedicated to restoring our core technological competitiveness. Technology and quality are the lifeblood of our organization, and this is a promise Samsung Electronics will never compromise on. Our focus will be on strengthening our fundamentals instead of relying on short-term fixes.
I firmly believe that realizing new technologies and enhancing our quality competitiveness are key to turning our situation around. Additionally, we will better prepare ourselves for the future.
We will reignite our unique passion and pursue our goals boldly until they are achieved. We intend to embrace a spirit of challenge, aiming for higher objectives rather than taking a defensive stance.
Furthermore, we will reevaluate our organizational culture and work methods, making immediate adjustments where necessary. Our goal is to rebuild a traditional culture rooted in trust and communication. When issues arise, we will address them directly and engage in open discussions to drive improvement. We are particularly committed to maintaining transparent communication with our investors whenever possible.
Dear valued customers, investors, and employees,
As long as we actively challenge ourselves, we are confident we can turn the current crisis into new opportunities. We seek your support and encouragement as Samsung Electronics aims to demonstrate its strength once again.
Thank you.
Han Jong-hee
Vice Chairman
Head of Device Solutions Division, Samsung Electronics
