Samsung Electronics is facing significant challenges in its semiconductor division, which has historically been the main profit driver for the company, leading to a rare public apology to investors for disappointing results.

Concerns are mounting that Samsung is falling behind competitors like SK Hynix and Taiwan Semiconductor Manufacturing Co. (TSMC) in key technological areas, particularly AI memory and outsourced chip production.

After a surge in operating profit earlier this year, Samsung's stock has struggled due to production delays in its latest high-bandwidth memory (HBM) chips, which are crucial for AI applications.

The company has acknowledged delays in its HBM rollout, while rivals SK Hynix and Micron Technology are accelerating their production to meet market demands.

Investor confidence has been shaken, with approximately $10.7 billion in Samsung shares sold by international investors since late July, reflecting skepticism about a quick turnaround.

In a separate corporate development, MBK Partners has invested approximately $660 million to acquire shares in Korea Zinc, raising their stake to over 38%.

Since July 9, 2024, Samsung's stock has dropped 32%, resulting in a loss of $122 billion in market value, marking the largest decline among chipmakers globally.

The rapid changes in the chip industry underscore the importance of AI technology in determining market leaders, with companies like Nvidia and TSMC thriving while Samsung falters.

Management challenges persist, with the company planning a conference call on October 31 to discuss its third-quarter earnings and potential leadership changes.

Recent leadership changes, including the appointment of Jun Young-hyun to lead the semiconductor division, have not yet restored investor confidence, as more decisive actions are anticipated.

Korea Zinc's shares dropped 30% on October 30, 2024, erasing $7 billion in value after the company's chairman announced plans for a discounted share issue.

Overall, Samsung Electronics, once poised to benefit from the global AI boom, has seen its fortunes rapidly decline due to losing ground to rivals in the semiconductor sector.