Samsung posts disappointing third-quarter profit guidance as it grapples with AI chips
PUBLISHED MON, OCT 7 20247:55 PM EDT
South Korean tech giant Samsung Electronics said it expects worse-than-expected profit for the third quarter.
In guidance released Tuesday, the world’s top memory chip maker said operating profit for the quarter ending September is projected to be around 9.10 trillion won, marking a 274% surge from last year’s 2.43 trillion Korean won. However, the figure missed LSEG expectations.
Analysts polled by LSEG projected an operating profit of 11.456 trillion Korean won ($7.7 billion) for the quarter ended Sept. 30. Samsung’s revenue for the quarter was expected to hit 81.96 trillion won ($61 billion), according to LSEG estimates.
Samsung Vice Chairman, Jun Young-hyun, who is the new head of the company’s Device Solutions Division, also issued a rare apology following the release.
Performance of Samsung’s memory business decreased as a result of “one-time costs and negative effects,” which includes inventory adjustments by mobile customers and increased supply of legacy products by Chinese memory companies,” Samsung wrote in a statement.
Samsung is the leading manufacturer of memory chips, which are utilized in devices like laptops and servers. It is also the world’s second largest player in the smartphone market.
Shipments of high-bandwidth memory “HBM3E” chips to major customers were also delayed, the company added.
“Well, let’s look at the number — very disappointing,” said Daniel Yoo, head of global asset allocation at Yuanta Securities Korea. He also noted that demand for legacy chips used in PCs and smartphones, which Samsung relies on, are not picking up around the globe.