Samsung Electronics is laying off employees in Southeast Asia, Australia, and New Zealand, with cuts expected to impact around ten percent of the workforce in the regions.
Citing sources familiar with the matter, Bloomberg reports that HR managers in Singapore have already been provided with details of the severance package being offered by the company.
The news comes a month after it was first reported that the company had told its global subsidiaries to reduce sales and marketing departments by 15 percent and administrative staff by around 30 percent.
Samsung has also been dealing with a summer of strikes at its facilities in South Korea and Sriperumbudur, near the city of Chennai, India. In both regions, workers engaged in strike action to demand higher wages and improved working hours.
Despite record profits, Samsung continues to struggle
Despite reporting a 933 percent increase in operating profit in April 2024 – driven by a resurgence in demand for its memory chips to support AI workloads – Samsung has struggled to capitalize on its position as a giant in the memory chip space, continuing to lose ground to its domestic rival SK Hynix.
Currently, market forecasts show the company is around six months behind leaders SK Hynix and three months behind Micron in the high-bandwidth memory (HBM) market, with both SK Hynix and Micron having sold out of their HBM chips until the end of 2025.
By comparison, Samsung has said it is sold out until the end of 2024 however, it has since delayed its mass production schedule for HBM3e 12H – its higher capacity DRAM chips – from Q2 2024 to H2 2024.
In a thread on X, formerly Twitter, financial analyst Dan Nystedt also said it’s also unclear if the company is shipping its HBM3e chips to customers, noting that there’s no product page for it on any of its global, English-language, or Chinese-language websites, with the site instead listing its older generation HBM3 as the top product currently available from Samsung.
In May, it was reported that Samsung’s HBM3e chips had failed tests run by Nvidia to check their suitability for inclusion in its AI processors. Although the issue has since been rectified, the company was seemingly dealt a blow when it was further reported Samsung’s memory chips would only be used in H20 GPUs, the less sophisticated version of its H100 processers which have been designed specifically for the Chinese market in compliance with US export controls.
The company is also facing challenges from TSMC, which has been reported this week as winning orders from South Korean AI chip developers over Samsung.
In September, three months after Samsung announced it was delaying construction at its Taylor fab in order to upgrade the foundry process at the facility from 4nm to 2nm, an industry insider told BusinessKorea that the yield gap between TSMC and Samsung had widened, with Samsung’s GAA yield sitting at “around 10-20 percent, which is insufficient for both orders and mass production."
