Samsung Electronics Executive Chairman Jay Y. Lee urged executives to guard against complacency from the start of the year, warning that this is the "last chance" despite record-breaking earnings, as the business environment surrounding Samsung remains challenging.
Lee, who has been tightening the reins on global management, revived the "sandwich theory" first raised by his late father as U.S.-China tensions show no signs of easing and global uncertainty intensifies. "The competitive landscape has changed, and the situation has become more serious," he emphasized, urging executives to "overcome the crisis and leap forward again."
Samsung Electronics (005930.KS) recorded fourth-quarter operating profit of 20 trillion won ($14.8 billion), a domestic record, drawing "return of the king" accolades both domestically and internationally. Capital markets responded favorably to Samsung's earnings recovery, with shares breaking through 150,000 won for the first time on January 22, up from 100,000 won in late October last year around Lee's third anniversary as chairman. Market capitalization exceeded 900 trillion won. Samsung is expected to post quarterly revenue exceeding 100 trillion won this year amid surging memory chip prices, with quarterly operating profit forecast to surpass 30 trillion won.
As such rosy forecasts spread, Lee reportedly told executives, "This is not the time to be complacent just because the numbers have improved somewhat," while instilling urgency with the "last chance" warning. Analysts say his message reflects awareness that recent strong performance largely reflects external factors like the semiconductor supercycle, rather than a complete restoration of the technological supremacy that sustained Samsung for decades.
Of the 20 trillion won in fourth-quarter operating profit, approximately 17 trillion won came from the memory business, which industry observers attribute to an unprecedented memory boom. According to market research firm DRAMeXchange, average selling prices for DRAM and NAND rose approximately 40% quarter-on-quarter during that period.
Excluding semiconductors, the smartphone and consumer electronics divisions face considerable business uncertainty. The Device eXperience (DX) division, which handles smartphones and home appliances, faces significant profit pressure from slowing global demand, aggressive competition from Chinese rivals, and rising component costs. The TV and home appliance businesses face structural burdens as competition with Chinese companies intensifies amid a prolonged downturn.
Lee's revival of the "sandwich theory" is also noteworthy. His late father, former Chairman Lee Kun-hee, coined the term in 2007, stating that "Korea's economy is sandwiched, with China catching up and Japan staying ahead." Industry observers interpret Lee's reference as highlighting the business environment where strategic choices and cost burdens between the U.S. and China have simultaneously increased.
Lee presented executives who completed the training with crystal plaques inscribed with "From Crisis to Resurgence," interpreted as a message that mountains remain to climb and that the goal is to rebuild overwhelming technological competitiveness.
Samsung stands at a crossroads in rebuilding its technological supremacy. Quality certification testing by Nvidia for sixth-generation High Bandwidth Memory (HBM), the most advanced memory product, is scheduled to conclude by February. Passing this test would quickly narrow the roughly one-year gap with SK hynix (000660.KS) in HBM and put Samsung back on track to reclaim industry leadership.
In the foundry business, while the market share gap with industry leader TSMC has widened, Samsung has reached a potential turning point. The company is accelerating yield improvements while discussing 2-nanometer process contracts with big tech companies including AMD and Qualcomm.
This year's executive training was held one month earlier than last year, seen as a move to encourage the momentum from the earnings rebound to quickly translate into rebuilding technological supremacy ahead of key milestones.
Since fully resolving his legal risks in July last year, Lee has maintained an active management posture both internally and externally. During a U.S. trip in December, he met with Tesla CEO Elon Musk and AMD CEO Lisa Su to explore partnership expansion, and traveled to China early this year to expand local business connections.
"Chairman Lee's determination to guard against the illusion created by the memory boom and quickly secure overwhelming advantage in the real battlegrounds that will determine Samsung's future is evident," an industry source said.
