Samsung Issues Apology Over Disappointing Q3 and AI Chip Challenges

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Key Takeaways

  • Samsung has issued a rare public apology over disappointing results.
  • A detailed report of the company’s earnings is expected on October 31.
  • Samsung now lags behind SK Hynix after delays in supplying HBM chips with Nvidia.

Samsung Electronics has posted its results for the third quarter and accompanied this with a public apology. 

The South Korean company estimated a 274% jump in operating profit at 9.10 trillion won compared to last year’s 2.43 trillion won for the quarter ending September 30. Unfortunately, this still missed the 10.3 trillion won estimated by LSEG SmartEstimate, and reported by Reuters. Notably, Samsung had posted 10.44 trillion won profit in the previous quarter this year. 

After the disappointing results, Samsung’s Vice Chairman Jun Young-hyun released a rare apology to customers, investors, and employees. Being the biggest memory chipmaker in the world, the apology highlights the challenges the company is facing. High-bandwidth memory (HBM) chips are a crucial type of chips used with Nvidia processors for AI training. These are driving recovery in the chip market. 

Samsung has fallen behind in supplying HBM to a major customer, allowing its rival SK Hynix to take the lead. The company had revealed previously that mass production of HBM3E would happen during the July to September period. 

Analysts are of the view that legacy memory demand is slowing along with weaker demand for smartphones and PCs. Demand for AI hardware is currently rising. Micron Technology had reported stronger-than-expected Q3 results last month. 

Samsung’s Head of Chip business who took over abruptly in May has emphasized on fundamental changes at the company. He added that the leadership is accountable for the current challenges.