Samsung's summit of unease

Hi, this is Yoolim in Seoul. This past week, I joined Samsung’s AGM for a look at how South Korea’s biggest company is perceived at home. Bu [View in browser]( [Bloomberg]( Hi, this is Yoolim in Seoul. This past week, I joined Samsung’s AGM for a look at how South Korea’s biggest company is perceived at home. But first... Three things you need to know today: - Tencent is cooking up [some Palworld lookalikes]( - Mitre opened a lab to test [US government’s AI systems]( - Ericsson will cut [1,200 jobs in Sweden]( Room for improvement About an hour south of Seoul, men and women, old and young, started gathering at a convention center in Suwon. It was a beautiful spring morning, the kind that makes you glad to be alive, but the gathering organized by Samsung had a much more somber mood. Inside the building, under banners in the company’s signature colors, the firm hosted shareholders who came with few reasons to be cheerful. In 2023, Samsung Electronics Co.’s operating profit plunged to a 15-year low as its chip division posted a loss of 14.9 trillion won ($11 billion). Samsung lost the crown of world’s biggest smartphone maker to Apple Inc. and its iPhone. Smaller rival SK Hynix Inc. stole a lead in the suddenly scorching-hot market for high-bandwidth memory chips, essential for training artificial intelligence models. And the share price was down 7% since the start of the year. (Nvidia’s CEO erased that deficit by endorsing Samsung later that day). On average, about one in 10 South Koreans own a Samsung share, but about 1 million frustrated retail investors dumped Samsung stock in 2023. For its 55th AGM, Samsung did something different: a townhall-like session to answer questions from the floor. The company put 13 top executives before the crowd to give more detailed answers. In the past, the practice on stage was mostly one-way communication, with a couple of executives fielding a few questions. Koreans aren’t known for their shyness in expressing their feelings. The Q&A session was charged with a mix of emotions, from bitterness and anger over missed opportunities to hope about making up lost ground. One man asked if the top management would consider stepping down, prompting a varied reaction from the crowd of 600 attendees. Some gasps, some murmurs. If Samsung founder Lee Byung Chull — who cultivated a performance-driven culture — were alive today, the interlocutor wondered out loud, what would he do with a management team that performed so poorly? In response, Samsung’s top brass admited their shortcomings, apologized candidly and vowed to do better. A man in his 70s talked about his pride in owning a piece of Korea’s most important company. He lamented the lackluster share performance and pleaded for the leadership to try harder. Most shareholders — even those who criticized the officials for their failure to foresee some new trends like AI — referred to Samsung as “our company.” My mind wandered to Samsung’s unforgettable shareholder meeting 20 years earlier. Back in 2004, a similar suggestion of resignation from a local activist was met with a rebuke by the then-vice chairman and briefly devolved into a physical scuffle as buff security guards hauled the hecklers out. Someone’s pants got torn in the chaos. Back then, Samsung was on a roll. Its components business was flourishing and that year its profit was comparable to Intel Corp. Samsung’s founding family and its professional managers believed that they were on a mission to build the most capable technology company in Korea. That self-image — critics called it arrogance — has created a culture of single-mindedness. But then, this company still carries the bruises and pride of launching its first mobile phone right at the height of the Asian financial crisis of 1998. It had imprinted a secret message on the circuit board inside: “the belief that we can do it.” At the shareholder meeting, Samsung co-CEO Kyung Kye-hyun said the company will get back on track, and rise to be first in the global chip market within two to three years. The secret message in Samsung’s first phone is still faithfully upheld by the people working for the company, but those who own it are now looking for more evidence than faith. —[Yoolim Lee](mailto:yoolim@bloomberg.net) The big story Florida Governor Ron DeSantis signed a bill [prohibiting minors under 14 from having social-media accounts](. The law will force all social-media users in the state to verify their age by submitting ID documents. One to watch Apple co-founder Steve Wozniak discusses his lawsuit against YouTube with Alix Steel and Scarlet Fu on Bloomberg Television. Get fully charged A federal judge dismissed X’s lawsuit against a group that [monitors online hate speech.]( The US and UK accused state-backed Chinese hackers [of sweeping cyberattacks.]( Qualcomm abandoned a deal to buy semiconductor firm Autotalks [over antitrust concerns.]( Uruguayan IT services company Nearsure plans to increase its staff [by 50% this year.]( More from Bloomberg Get Bloomberg Tech weeklies in your inbox: - [Cyber Bulletin]( for coverage of the shadow world of hackers and cyber-espionage - [Game On]( for reporting on the video game business - [Power On]( for Apple scoops, consumer tech news and more - [Screentime]( for a front-row seat to the collision of Hollywood and Silicon Valley - [Soundbite]( for reporting on podcasting, the music industry and audio trends - [Q&AI]( for answers to all your questions about AI Follow Us Like getting this newsletter? 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