“Today, the leadership team at Samsung Electronics wishes to apologize for not meeting your expectations with our performance,” wrote Jun, the head of the company’s chip division. “We have caused concerns about our technical competitiveness, with some talking about the crisis facing Samsung. As leaders of the business, we take full responsibility for this.”

This isn’t the first time Samsung leaders have delivered a tough message to investors. After reporting falling annual revenue and profits in March, the company opened its yearly letter to shareholders by admitting that 2023 had been “exceptionally challenging,” noting competition in the all-important memory business had intensified amid a deep industry downturn.

Similar challenges have persisted in 2024. On its face, comparative results looked great, with the company estimating operating profit would come in around 9.1 trillion won, or $6.76 billion, up from 2.430 trillion won a year ago. That number is down almost 13% from last quarter and comes below expectations, however, which Jun’s letter acknowledged.

Despite Samsung reporting its highest quarterly revenues in over two years, the company’s Korea-listed shares fell 1% on Tuesday. The stock is down 24% this year as Samsung has so far struggled to generate a return on its investments in artificial intelligence while several of its core businesses lose market share.

Slowing PC and mobile demand has weighed on the memory market, including for dynamic random-access memory, or DRAM, an area where Samsung has traditionally dominated. The company has also lagged in the market for high-bandwidth memory chips, which are critical components of Nvidia’s GPUs, with competitors SK Hynix and Micron better equipped to profit off the AI boom.

That’s also the case in contract semiconductor manufacturing, where Samsung—much like another legacy tech name, Intel—has failed to meaningfully close the gap with Taiwan Semiconductor Manufacturing Co. Macquarie analysts recently warned Samsung’s $17 billion foundry in Texas, initially seen as a major win for the Biden administration and the CHIPS Act, could become a “big stranded asset,” the Financial Times noted.

Meanwhile, competition in high-end smartphones, after recent releases from Huawei and Apple—and particularly after the iPhone 16 reveal last month—doesn’t make the picture any prettier.

In Tuesday’s contrite letter to investors, Jun promised Samsung would address these and other issues head-on.

“These are testing times,” he wrote. “But we are confident that we will turn this season of challenge into one of new opportunities.”