Samsung Is Missing Its AI Moment

If the pace of technological advancement has increased exponentially in the past century, so has the speed at which fortunes can be made or lost. As the tech earnings season kicks into gear and lays bare the results of various AI strategies, Samsung Electronics provides a cautionary tale. Just a few months ago, South Korea’s biggest company looked primed to benefit from the global AI boom: Profits were surging and its stock was rising toward an all-time high. Then came disappointing preliminary quarterly results and a rare apology by the head of Samsung’s chip business earlier this month. Now, concerns are mounting that the company is losing out to smaller rival SK Hynix in AI memory and failing to gain on Taiwan Semiconductor Manufacturing in outsourced chipmaking. Samsung shares have tumbled 32% from this year’s peak on July 9, losing $122 billion of market value in that span, more than any other chipmaker worldwide. Here’s why investors are souring on the company, as Samsung prepares to hold a conference call on Thursday after releasing more detailed third-quarter earnings.

Corporate drama of another kind is brewing in South Korea. Billionaire dealmaker Michael ByungJu Kim’s eponymous private equity firm MBK Partners has stepped into one of the most fraught corporate battles in recent Korean history, a tussle pitting the founding families behind heavyweight Korea Zinc Co. against each other. It is an audacious move for Kim, a Korean-born, US-educated financier. MBKP and partner Young Poong, Korea Zinc’s biggest investor, spent about $660 million buying up stock tendered by shareholders during their takeover bid, increasing their combined stake to more than 38%. Meanwhile, Korea Zinc shares tumbled 30% on Wednesday, wiping $7 billion off its value, after the company’s chairman — in the opposing camp — surprised the market with plans for a deeply discounted share issue.