Samsung Electronics, which is struggling to compete with rivals such as SK Hynix and Micron Technology in the advanced chip sector amid the AI boom, plans to slash chip jobs and restructure related businesses. 

Samsung Electronics, the world's largest memory chip maker, is auditing the memory division of the Device Solutions DS division, which is responsible for the semiconductor business. People familiar with the matter said this was directed by Jeon Young-hyun, head of the DS division and vice chairman. The company will reorganize existing staff by the end of the year, with a large number of people leaving. It will scale back the chip manufacturing business at the foundry and restructure the research center responsible for developing future chip technology.

01 Statistics about the executives

In the second quarter, Samsung's DS division had a total of 438 executives, accounting for 38% of the company's total 1,164 executives. Samsung's chip division has more than twice as many executives as SK Hynix, which has only 119 executives. The vast majority of executives came in 2017-2018, when the chip was hot. However, in recent years, when the competitiveness of Samsung's chip business has been questioned, there have been no obvious layoffs. At the end of the year, there may be a reshuffle of the leadership of the three key business units of the DS division - memory, foundry and system LSI, as well as the positions of chief technology officer, manufacturing and technology director.

02 Samsung's view

Samsung Electronics believes that the leadership bears full responsibility and must take the lead to make the poor performance in the third quarter a turning point for the company. Samsung plans to improve the performance of its semiconductor business through a drastic reorganization, especially the situation where HBM competition is at a disadvantage. Among the three storage manufacturers, Samsung, SK Hynix and Micron, Samsung is the only company that does not supply the latest AI chip HBM3E to Nvidia, the world's top AI chip designer. Currently, Samsung is supplying Nvidia with fourth-generation 8-layer HBM3 chips in small batches. HBM3E is the most profitable memory semiconductor, mainly used for Nvidia's AI accelerators. Now SK Hynix has been Nvidia's exclusive supplier of HBM3E. The backwardness of the HBM business has also had a great impact on the sales of Samsung's general-purpose DRAM products, such as DDR5. Analysts believe that this is a positive sign that Samsung has recognized the problem and has begun to solve it.

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