Audience friends, have you heard? The business war drama is here again! There are wonderful performances every year, but this year's scenes seem to be even more lively. Samsung seems to have gone a little wrong, with operating profits plummeting by 85 percent, as if they had slipped to the bottom of the slide, the worst since the 2008 financial crisis. So, why is it so miserable?
Let's take a look back at Samsung's history. Once, Samsung was known to everyone, especially in the mobile phone and chip industry, with an annual income of trillions, almost the overlord of the industry. However, the recent news is a big surprise, Samsung's chip business has lost more than 80 billion, and its operating profit in 2023 has dropped by nearly 85% compared with last year. Yes, yes, that's 85%, the lowest since the 2008 financial crisis.
It's amazing to see that number. How could Samsung, the former chip giant, get into such a predicament? The reasons are complex and simple. Samsung's main profitability** was in its semiconductor business, which mainly produced memory chips such as DRAM and NAND. However, Samsung's poor performance in the Chinese market and its sharp decline seem to be getting worse.
To make matters worse, the United States exerted pressure to limit the development of China's high-tech industry, and South Korea joined an organization called the "Chip Quadripartite Alliance". As a leader in the field of memory chips, Samsung has naturally become the main force of this alliance. However, what I didn't expect was that just 4 months after South Korea joined the "Core Limit Alliance", Samsung Electronics' chip inventory surged by 40%, which can only be said to be self-inflicted.
In today's globalized world, a huge market like China is crucial for any international brand, and Samsung's choice to withdraw is effectively tantamount to cutting itself off. The lesson is very profound for Samsung, and it reminds us that no company can ignore the forces of any one market, especially a large market like China.
However, just as Samsung is struggling, Huawei is emerging in the market. The Kirin 9000S chip equipped with Huawei's Mate 60 series mobile phones is completely "Chinese core", which is a huge encouragement for China's technology industry. Huawei's success is not only the success of its products, but also the success of its spirit, which demonstrates its independent R&D capabilities and the spirit of daring to face challenges.
Faced with this situation, Samsung seems to have begun to reflect. According to reports, Samsung plans to return to the Chinese market, which is undoubtedly an opportunity and a challenge. But if you want to return to the Chinese market, you need not only a technological breakthrough, but also a re-establishment of your image in the minds of consumers. For Samsung, this is not only a new beginning, but also a huge test.
In this era of fierce global competition, no enterprise can stand still, only continuous innovation, in order to be invincible in the market. Samsung's reflection and return have given us an important enlightenment: in this era, only companies that have the courage to face challenges and innovate can stand out in the future competition.
So, do you think Samsung can make a comeback in the Chinese market? Looking forward to hearing your thoughts and comments!