Samsung Chief's Warning: "Last Chance" Despite Record Profits

Record profits of $13.8 billion should have been cause for celebration. Instead, Samsung Electronics Chairman Lee Jae-yong delivered a stark warning: this might be the company's "last chance."

Success Masking Deeper Challenges

Samsung's fourth-quarter preliminary results were nothing short of spectacular. Revenue hit $64 billion with operating profit reaching a quarterly record of $13.8 billion, driven by a semiconductor industry recovery.

Yet during a recent executive seminar, Lee told some 2,000 Samsung Group executives not to get comfortable with short-term gains. His message was clear: fundamental technological competitiveness needed rebuilding, and fast.

The chairman invoked his late father's prescient "sandwich crisis" theory from 2007, when Lee Kun-hee warned that South Korea was caught between Japan's technological advancement and China's cost competitiveness. Nearly two decades later, that squeeze has only intensified.

From Sandwich to Triple Threat

"Korea is still stuck in a sandwich position," Lee Jae-yong explained. "What has changed is that the competitive landscape has shifted and the situation has become even more serious." He was referring to the escalating US-China strategic rivalry that has turned technology into a geopolitical weapon.

The numbers tell the story of Samsung's recent struggles. From 2023 through mid-2025, the company battled a semiconductor downturn that hammered profits. While it maintains leadership in memory chips, the gap with TSMC in system semiconductors continues widening. In AI chips—the industry's hottest segment—Samsung remains a distant player while Nvidia dominates.

Last year, Lee had already sounded the alarm, saying Samsung had "lost its Samsung-like resilience" and needed a "do-or-die" mindset.

The AI-First Transformation

Samsung's response strategy centers on three pillars: AI-centered management, top talent acquisition, and corporate culture innovation.

The company has already committed to integrating AI across its entire product lineup, from Galaxy smartphones to home appliances and semiconductors. Manufacturing automation through robotics represents another key focus area.

But the real battle lies in talent acquisition. Can Samsung compete with global tech giants for the world's best AI minds? Traditional Korean corporate hierarchies may need fundamental restructuring to attract the creative, flexible workforce that AI leadership demands.

Nine-Year Hiatus Ends

Samsung's decision to resume group-wide executive seminars after a nine-year break carries symbolic weight. These gatherings, held annually from 2009 to 2016, were suspended following founder Lee Kun-hee's death.

Their revival signals Lee Jae-yong's full assumption of leadership while demonstrating the company's commitment to unified crisis response. It's a return to the collaborative decision-making that built Samsung into a global powerhouse.

Global Implications

For the broader tech industry, Samsung's internal reckoning reflects larger competitive dynamics. Despite record profits, even industry leaders recognize they're just one innovation cycle away from irrelevance. The semiconductor industry's boom-bust nature makes today's success tomorrow's vulnerability.

Investors should note the contradiction: Samsung's stock has surged on strong earnings, yet management sees existential threats ahead. This disconnect between market sentiment and executive urgency often precedes major strategic pivots—or competitive failures.