Collapse, Counterattack, Comeback

Context

Samsung continues to dominate the smartphone, semiconductors, and consumer electronics industry in 2025, but the march to this high ground was anything but smooth.

Between 2020 and 2024, the electronics giant was crippled by collapsing chip prices, battery setbacks, and smartphone skirmishes that slashed profits by over 78%. The company was forced to launch a counter-offensive built on AI, operational discipline, and sustainability.

Real-Life Story

Samsung was born in 1938 when Lee Byung-chul opened a modest trading post in Daegu, selling dried fish, noodles, and groceries. Over the decades, it expanded its lines like a growing regiment, from textiles and shipbuilding to insurance. By the late 1960s, Samsung Electronics was established, arming the company with technology firepower that would define its future campaigns. Televisions, displays, and semiconductors became Samsung’s artillery, allowing it to take commanding ground in the global market.

From 2020 to 2024, however, the tides turned. The semiconductor stronghold, long Samsung’s profit fortress, came under siege. Oversupply and weakening demand led to memory chip price collapses. In Q2 2023, operating profit fell by 96% year-on-year, from KRW 14.1 trillion to KRW 640 billion. Entire battalions of DRAM and NAND chips became stranded inventory. The once-reliable engine sputtered.

Market Downturns and a Looming Deficit

Then came a blow to Samsung SDI, the battery unit. In Q4 2024, it posted its first quarterly loss in seven years, a KRW 256.7 billion deficit. Revenues were down nearly 29% as clients trimmed orders. The full-year operating profit collapsed 76.5% versus 2023, a rout in a market once thought secure.

Meanwhile, the mobile division faced a drawn-out trench war. Global smartphone demand weakened, especially in midrange lines such as the A-series. Market share fell to 28.3% in 2024 from 30.1% in 2023. Rivals such as Apple and Xiaomi pressed harder, pushing Samsung into defensive manoeuvres. Costs rose, margins thinned, and the division took heavy fire.

The company’s balance sheet bore the scars. In 2023, annual earnings dropped 78.6%. Cash flow was drained by R&D and dividends, forcing Samsung to lean on borrowings. Short-term profitability was battered, though the war chest for long-term campaigns was kept stocked.

Yet even under fire, Samsung regrouped. By late 2024, the counter-offensive was underway. Revenues climbed to KRW 300.9 trillion, with operating profit of KRW 32.7 trillion. The strategy was clear: put AI at the centre, reorganise operations, and seize new ground.

Samsung’s AI Firepower

AI became Samsung’s secret weapon. The Galaxy S24 and S25 turned into flagship war machines, with generative AI features giving Samsung an edge. Customers rallied behind smarter photography, voice tools, and ecosystem integration. In Q1 2025, the MX division reported KRW 37 trillion, shipping 60.5 million units and regaining 20% global market share.

Semiconductors were restructured around high-bandwidth memory for AI workloads. Production was trimmed, efficiency tightened, and supply chains localised to reduce geopolitical risks. SDI began its march back to profitability through restructuring and innovation.

Sustainability was also elevated to doctrine. Samsung pledged to end plastics in packaging by 2025 and expand recycled materials across products. This campaign won allies among investors and consumers alike. Meanwhile, ecosystem marketing bound together smartphones, appliances, and wearables, building loyalty and ensuring Samsung’s frontline was harder to breach.

Leadership also stabilised. Jay Lee, despite years of turbulence and imprisonment, returned to the helm as executive chairman, giving the company strategic direction. Governance reforms and crisis management restored credibility. Samsung not only held its ground but began advancing again.

PostScript: By 2025, Samsung has emerged battle-hardened and adaptive. Its AI-driven products are cutting through the fog of market uncertainty, while its semiconductor and battery units prepare for renewed offensives. The company’s vertical integration of chips, displays, and devices functions as a combined arms strategy that rivals struggle to match.

What sets Samsung apart is not just recovery but reinvention. It turned adversity into a drill ground, forging a company more resilient, agile, and innovative than before. As new theatres of war open in AI, extended reality, and sustainability, Samsung is not merely surviving the campaign; it is leading the charge.

Key Lessons

1) Crisis Can Be a Catalyst for Transformation

When profits collapsed by 96% in a single quarter, panic was a luxury Samsung could not afford. In a situation like this, WarTime CEOs hold the line, conserve resources, and prepare to counter-attack with precision investments.

2) Quality Control is Non-Negotiable for Survival

Lee stressed the value of craftsmanship over quantity. This cultural shift ensured Samsung stopped flooding the market with cheap goods to focus instead on products built to last. In the smartphone sector, Samsung proved that premium lines are the heavy cavalry. When midrange trenches collapse, WarTime CEOs unleash their strongest units with distinctive innovation to win back the initiative.

3) Branding is as Strategic as Engineering  

Samsung rebranded itself as a global leader, investing in sleek design, aspirational marketing, and sponsorships that placed its name alongside world-class competitors. Rebuilding brand trust after failures is akin to winning hearts and minds after a retreat. Samsung doubled down on safety, service, and reliability to restore confidence in the brand.

4) AI Integration Can Provide Firepower 

Incorporating AI into products isn’t just another tech update. It’s asymmetric warfare. By embedding AI across products and chips, Samsung struck where rivals were weakest, turning the tide in its favour.

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Until next week, may the force be with you.

Kevin

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