SUWON — "Samsung Electro-Mechanics is growing fast on the artificial intelligence boom, but even we cannot escape the 'red sandwich crisis,' with China closing in quickly."
Chang Woo-seok, chief AI officer at Samsung Electro-Mechanics (009150), made the remarks in an interview with The Seoul Economic Daily at the company's Suwon campus on the 13th. "China has more than 10 times as many companies in the same business as we are in, so developing technology at the same pace will not hold off their pursuit," he said. The red sandwich crisis refers to the dual squeeze of being pressured by China on both advanced technology and price competitiveness.
Samsung Electro-Mechanics is expected to post operating profit of 2 trillion won ($1.4 billion) this year, more than double last year's figure, as it expands sales of core components for AI chips to big tech firms. But AI components, like other manufacturing sectors, will inevitably draw Chinese competition, and the company must prepare preemptively through new technologies such as physical AI, said Chang, an executive vice president. The company created the CAIO post in August to accelerate its internal AI transformation.
"We need to overcome China's human-wave tactics by building virtual developers that can collaborate alongside people — in other words, AI agents," Chang said. "We have assigned every team a mandatory AI agent development project, with more than 100 projects now under way, and we also plan to aggressively adopt physical AI, which can dramatically improve manufacturing efficiency." He also cited securing "AI-ready data" as a key task, so that data from a range of manufacturing sites can be used to train AI.
As part of that push, Samsung Electro-Mechanics has developed its own AI model, SEMCO Work, and held its first in-house AI hackathon at headquarters on the same day to spread the tool across the company. Wearing a hooded zip-up jacket, Chang told employees that "more than 10 sites are being expanded and we are growing in scale, but in some areas we are also stagnating," urging them to build up substance alongside size.
Two hundred employees will compete over four days starting that day, using SEMCO Work to develop AI agents that can transform their work. The company plans to award a total of 33 million won ($23,000) in prize money to top teams and roll out the winning results companywide.
Chang Duck-hyun, president of Samsung Electro-Mechanics, said the AI era is "still only Jan. 1," and that the company must respond aggressively to the growth and innovation AI will set off. "The experience of building an agent tailored to your own work through this hackathon will mark the start of 'one person, one AI agent,'" he said.
