Samsung Electronics on Thursday reported third-quarter revenue and operating profit that were barely above its own expectations, but its chip business posted a significantly lower profit than within the previous quarter.
The semiconductor division reported operating profit of three.86 trillion won (about $2.8 billion) within the third quarter, down 40% from the previous quarter.
While its memory chip division benefited from strong demand for its artificial intelligence and traditional server products, Samsung said “inventory adjustments negatively impacted mobile demand.” The company said it was also scuffling with “the increasing supply of end-of-life products in China.”
Samsung is the leading maker of memory chips for devices reminiscent of laptops and servers and the second largest player within the smartphone market worldwide.
While AI boosted demand for advanced nodes from its foundry unit, Samsung said demand for mobile devices and PCs fell wanting expectations. The Korean tech giant said the recovery in mobile and PC demand will likely be delayed, although interest in additional advanced products will proceed to grow attributable to AI investments.
Here are Samsung's results in comparison with guidance released earlier this month:
- revenue: 79.1 trillion won versus 79 trillion
- Operating profit: 9.18 trillion versus 9.1 trillion won
These forecast numbers were well below the LSEG estimate for operating profit of 11.456 trillion won. Samsung Vice Chairman Jun Young-hyun, the brand new head of the corporate's device solutions division, offered a rare apology after the rules were released.
Samsung expects demand for these advanced chipsets to further fuel growth next yr. The company also expects demand for servers to stay strong as technology firms proceed to make “robust investments.”
Shares of Samsung Electronics listed on the South Korean stock exchange have fallen 24.71% thus far this yr.
image credit : www.cnbc.com