Samsung’s Semiconductor Struggles Aren’t a Tech Problem, but Culture: Report

Samsung has long been a dominant force in the global semiconductor industry, especially in memory chips. But the company is now facing what many are calling a structural crisis — one rooted not in technology, but in internal culture. Despite the AI-driven boom in semiconductor demand, Samsung’s earnings have plummeted lately, as it continues to struggle in HBM and foundry businesses.

Interviews with former Samsung engineers reveal that the reasons go far deeper than missed technical milestones. The company’s internal culture, defined by rigid hierarchy, fear of failure, and blame-oriented management, is driving top talent away — and straight into the arms of competitors like SK Hynix.

Samsung’s internal culture is driving top talent away

A recent report by ChosunBiz highlights the stark contrast in workplace culture between South Korea’s two semiconductor giants: Samsung and SK Hynix. At Samsung, a culture of fear and blame often discourages employees from proposing bold ideas. Employees fear that their leaders will hold them responsible if those ideas fail.

SK Hynix, meanwhile, fosters a bottom-up, competitive environment where teams are encouraged to innovate. It has multiple R&D teams working in parallel and competing based on performance and feasibility. The best idea wins, not the one safest for career survival. This difference was evident in the development of HBM technology. SK Hynix advanced stacking techniques to 20 layers through internal competition, while Samsung, bogged down by internal politics and risk aversion, fell behind.

The fallout is significant. Engineers with decades of experience at Samsung, once the vanguard of memory innovation, are steadily migrating to SK Hynix. These include leaders in DRAM, NAND, and even foundry processes. The exodus isn’t about pay — engineers cite internal “line-standing” culture, opaque promotions, favoritism, and resistance to outside talent as core reasons for leaving.

At Samsung, the so-called “pure-bloodism” in the memory division keeps external hires from reaching leadership roles. In contrast, SK Hynix has empowered newcomers — including former Samsung veterans and engineers from smaller firms — to lead key projects, helping turn previously weak areas like NAND into growth engines.

Experts say Samsung’s issue isn’t its engineers — it’s how the company is run. Financial and HR management dominate technical decisions, stifling innovation. Without structural change from the top, Samsung risks losing its “super gap” edge, not because it lacks the tools, but because it won’t let its people use them. The sooner people at the top realize this, the better for Samsung.