Samsung to face questions from shareholders after AI chip failings, stock price drop

 Samsung Electronics is set for a tough annual general meeting on Wednesday with shareholders frustrated by its failure to ride a boom in artificial intelligence that made it one of the worst-performing tech stocks last year.

Co-chief executive Han Jong-hee and the head of its chip division Jun Young-hyun will be among executives attending the meeting which is scheduled to start at 9 am (0000 GMT). Other issues in focus include strategies to mitigate the impact of US tariffs and what will drive new growth.

In internal meetings, Samsung has acknowledged it has lost its technological edge. 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," according to 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."

Shares in Samsung tumbled by nearly a third last year while those of SK Hynix climbed 26 percent. In recent years, Samsung has also lost market share to TSMC in contract chip manufacturing and to Apple and Chinese rivals in smartphones.

In January, Samsung warned of sluggish sales of its AI chips in the current quarter due to U.S. export restrictions to China, which has become its most important market. That also means it faces bigger headwinds than rivals from potential US tariffs on China.

The tech giant launched a share buyback plan worth 10 trillion won (HK$53.5 billion) in November after its stock plunged to more than four-year lows. Its shares have gained 7 percent since then.

REUTERS