Samsung Electronics' institutional sector has decided to transfer some personnel from the foundry (semiconductor contract manufacturing) division to the high bandwidth memory (HBM) business, amid reports of internal discontent regarding 'staffing'. While there is an urgent need for personnel transfer for the next-generation HBM development due to a contraction in the HBM business, concerns over 'staff leakage' in the foundry division cannot be ignored, deepening the struggles of Samsung's semiconductor division.
According to industry sources on the 10th, the foundry division of Samsung Electronics aimed to select personnel that would not impede mass production as they transferred to the HBM business. However, it appears that confusion arose between the foundry division and the memory manufacturing technology center regarding the transfer process, which required 'elite personnel' that could be immediately deployed for the development and mass production of next-generation products like HBM4 (6th generation HBM). This led to an unexpected public recruitment process, termed job posting.
◇ Samsung Electronics needs to respond aggressively to HBM4
Samsung Electronics' institutional sector has suddenly found itself in a precarious position as it has been overtaken not only by SK hynix but also by Micron, which had long held the 'eternal third' position, in the HBM3E (5th generation HBM) market. This shift comes as Micron, now entering the HBM3E supply chain with NVIDIA, has received a larger order volume from NVIDIA than expected, significantly expanding its production capacity. With Samsung Electronics unable to even pass the quality tests for HBM3E, its position in the HBM3E market is inevitably shrinking.
In a further setback, Samsung Electronics has ceded the number one position in the DRAM market to SK hynix. According to market research firm Counterpoint Research, SK hynix held a 36% market share in the DRAM market in the first quarter of this year, while Samsung Electronics came in second with 34%. Just a year ago, SK hynix was more than 10 percentage points behind Samsung Electronics, but it has now surpassed the company, leveraging its advantage in the HBM market.
Samsung Electronics is determined to stake everything on HBM4 to avoid repeating the mistakes made with HBM3E. HBM4 will apply foundry processes to the 'logic die', which plays a crucial role in processing operations of HBM. This will not only significantly enhance the performance of the logic die but also allow for the 'customized' production of HBM according to the design assets (IP) and applications desired by clients. Unlike SK hynix and Micron, Samsung Electronics possesses foundry process capabilities, positioning it advantageously in this area. This is why Samsung Electronics intends to transfer skilled foundry personnel to the HBM business.
◇ “Now is the time for Vice Chairman Jeon Young-hyun to demonstrate leadership”
However, there is considerable concern regarding personnel leakage in the foundry division. Although this is the first public transfer to the HBM business, employees had been unofficially dispatched since the second half of last year. While it is true that the decrease in foundry operating rates has provided some leeway in personnel management, the possibility of a shortage of skilled staff needed for future technology development has grown. As losses accumulate in the foundry division, the morale of the remaining staff is also declining due to the transfer of personnel to the memory division.
An industry insider commented, “It is indeed true that there is internal unrest as foundry division employees are sequentially moving to the memory division,” and added, “If the transfer continues amid growing feelings of relative deprivation due to wage gaps between the memory and foundry divisions, it could lead to conflicts between business units.”
It seems that both Vice Chairman Jeon Young-hyun, head of the institutional sector, and President Han Jin-man, head of the foundry division, are deeply concerned. Although the involvement of elite personnel from the foundry division is essential to enhance the product competitiveness of the next-generation HBM, President Han is in a desperate situation to retain key staff as the market share gap with TSMC continues to widen.
A source from Samsung Electronics' institutional sector noted, “Samsung's semiconductor division has maintained its number one position by consolidating its capabilities under a common goal during crises,” adding, “At the core of this has been the director’s decisive actions and the leadership that unites the employees. Now is the time for Vice Chairman Jeon to leverage his leadership to prevent the transfer process from escalating into conflict between divisions.”