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THE INVESTOR
March 03, 2024

Market Now

[CES 2023] Samsung CEO braces for rough year

  • PUBLISHED :January 09, 2023 - 09:36
  • UPDATED :January 09, 2023 - 09:36
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Samsung Electronics Vice Chairman and co-CEO Han Jong-hee speakes during a press briefing held on the sidelines of the CES trade show in Las Vegas, Friday. (Samsung Electronics)

LAS VEGAS – Samsung Electronics Vice Chairman and co-CEO Han Jong-hee said the South Korean tech giant was bracing for a rough year ahead, renewing his commitment to seeking new growth drivers in futuristic technologies such as robots and the metaverse.

“Overlapping crises, including the prolonged economic recession, geopolitical tension, supply chain risks and climate change, have drastically increased uncertainty in the market,” Han said at a press conference Friday held on the sidelines of the CES trade show that kicked off Thursday in Las Vegas.

“How the company overcomes the multiple crises will determine the success or failure in the future,” he added.

The CEO’s comment comes on the same day that Samsung forecast its operating profit in the fourth quarter in 2022 would plunge 69 percent on-year to post 4.3 trillion won ($3.4 billion), which was far below the market consensus of 6.9 trillion won. Sales for the October-December period were also estimated to decline to 70 trillion won, down 8.6 percent compared to a year ago.

Weakening demand for chips and home appliances due to global economic downturn, was cited as the reason. High exchange and interest rates also affected consumer sentiment, the vice chairman said.

In times of hardship, he said Samsung always stuck to the simple truth to always focused on the fundamental values.

For future growth engines, the world’s largest memory chip and smartphone maker is looking into robots and metaverse, Han said.

The tech giant recently decided to invest 59 billion won ($46 million) in a South Korean robot maker, called Rainbow Robotics. The robot maker, which became the first listed robot company to secure an investment from Samsung, was founded in 2011. The company introduced its flagship collaborative robots in 2020.

Samsung is also serious about the metaverse, though the hype over the virtual reality space appears to have peaked and subsided fast at the moment.

“As it is with all technologies, it always attracts attention when it first begins. But technology goes to where it is the most needed, and I think the metaverse is also in that flow,” Han said.

“Companies have not stopped developing technology (for the metaverse), they are all working hard. But they are looking at where this technology can go and more details will be out as time passes. Now, the metaverse and digital twins are a hot topic.”

The CEO who oversees smartphone and home appliance businesses also pledged to elevate Samsung’s ailing presence in the Chinese market, where its market share in smartphone sales has remained at a tiny 2 percent.

Citing a new business innovation team in China launched in 2021, Han said, “We have found what the problem is. To give an example of our TV lineup, our strategy was largely centered on the US and Europe, but we have learned China has its own system of preference.”

Han admitted Samsung’s products came short of Chinese consumers’ expectations and vowed to launch more tailored products and services exclusively for Chinese consumers.

By Jo He-rim

Korea Herald Correspondent

By Jo He-rim (herim@heraldcorp.com)

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