A healthy profit stream this year meant that Samsung was smiling all the way to the bank, with its Q2 2024 financial results witnessing a whopping 15-fold operating profit increase compared to the same period a year ago. The Korean giant recently announced its guidance for Q3 2024, and while Samsung expects to post a promising net earnings figure, the company also issued an apology, saying that the results were below market expectations.
Lagging behind its rivals, Samsung has been unsuccessful in supplying high-end chips to NVIDIA, resulting in a missed opportunity during the booming AI market
As reported by Hankyung, Samsung is expected to post an operating profit of 9.1 trillion won, or $6.77 billion, for the Q3 2024 period, resulting in a 274.5 percent increase compared to Q3 2023. However, it was forecasted to pocket 10.1 trillion won, or $7.5 billion, by LSEG SmartEstimate. Realizing that it has likely underperformed, Samsung Electronics DS Division Vice Chairman Jeon Young-hyun issued an apology in the form of a press release, with the following statement provided.
“To our customers, investors, and employees who have always loved Samsung Electronics. Today, we, the management of Samsung Electronics, would like to first apologize to you. The performance that fell short of market expectations has raised concerns about the fundamental technological competitiveness and the future of the company. Many people are talking about Samsung’s crisis. All of this responsibility lies with us who are leading the business.”
Despite being reported to commence mass production of its next-generation HBM4 memory by the end of 2025, Samsung’s competition appears to have the upper hand, as it has lost out on chip orders to NVIDIA, with SK hynix capitalizing on the chance to fulfill the graphics processor manufacturer’s requirements. This loss comes at a time when the Korean technology behemoth had the opportunity served on a platinum platter, as the booming AI market will continue to grow and needs a consistent supply of chips to develop cutting-edge processors.
Lee Min-hee, an analyst at BNK Investment & Securities Analyst, believes that Samsung’s earnings are a ‘shock’ compared to what others expected initially, and he does not believe that the figure will improve in the current quarter. Samsung has also failed to attract new customers towards its 3nm GAA technology due to unstable yields, with local firms that once relied on their foundry partner have now partnered with TSMC.
Qualcomm was also forced to give exclusivity to TSMC for Snapdragon 8 Gen 4 orders because Samsung failed to improve its yields, suggesting that this area is one of the many that requires a critical study, with plans for improvement right away. While the earnings guidance is not a poor showing when compared to how Samsung performed financially in 2023, it is a major slump compared to Q2 2024.
News Source: Samsung
About the author: Omar Sohail is a reporter and analyst for Wccftech's mobile section, specializing in the technology and business of the mobile industry. His expertise lies in the intricate hardware supply chain, covering developments in semiconductor manufacturing, chip lithography, and camera sensor technology.
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