Samsung to Lay Off Employees Amid AI Struggles, Falling Semiconductor Market Share, and Stock Decline

Semiconductor legend Intel ($INTC) may be one of the US market’s worst-performing stocks this year, but it’s not the only chipmaker in dire straits. Down 20% this year, Samsung Electronics — famous for its smartphones, TVs, and other household products — is cutting ~10% of its workforce in specific overseas markets to improve efficiency. Quietly, its struggles in the AI business are playing a big role.

• Samsung has been unable to take market share from global leader Taiwan Semiconductor ($TSM) — in Q1 2024, the versatile manufacturer held just 11% of the semiconductor foundry market, while TSMC commanded 61.7%.
• Worsening matters, Samsung has fallen behind in the AI space, with its memory chip leadership under threat from competitor SK Hynix and its Nvidia-paired chips.

Problems galore: On top of its AI struggles, Samsung is also dealing with labor and trade issues, making it harder for the company to recover from its shortcomings. Earlier this year, its largest union went on strike for the first time after failed negotiations. And unionized employees in India have also been on strike for three weeks. The cherry on top? The port strike has backed up West Coast ports and caused delays in delivering products and goods.