Samsung is doing less badly than expected. Although the South Korean giant’s semiconductor business fell sharply in the third quarter, it is finally ready to deliver its most sophisticated memory chips. And it was time.
A memory chip expected to be ready soon
Because the time was serious. At the beginning of October, Jun Young-hyun, head of Samsung Electronics’ semiconductor division, published a letter apologizing for not meeting expectations.
In particular, the accumulated delay in the artificial intelligence sector (IA): the company has failed to take advantage of the growth in technology, which nevertheless requires ultra-powerful memory chips, a sector normally dominated by Samsung. They work in tandem with AI processors.
Its most advanced chip, the HBM3E, has now passed stages “ significant » in its qualification process with a prestigious clienta company manager informed its shareholders. This is, without a doubt, NVIDIA, the undisputed leader in the artificial intelligence accelerator sector. Delivery of the HBM3E was nevertheless scheduled to start in the third quarter… It will do so one quarter late.
The semiconductor division in free fall
Accordingly, Samsung’s semiconductor division saw operating profit fall 40% compared to the previous quarter. A decline which benefits its direct rivals: SK Hynix and Micron Technology have beaten it in the development of high bandwidth memory chips.
This late response to the AI boom increases Samsung’s reliance on traditional, low-margin chips. It is, therefore, more vulnerable to competition from China, as well as to the slowdown in demand for smartphones and computers.
Samsung is preparing a major reorganization
Fortunately, the company has been able to rely on other units to boost revenue, particularly through the release of new devices. It announced a net profit of $7.32 billion, an increase of 73% compared to the previous year. Its overall turnover increased by 17% to reach $57.4 billion.
Samsung Electronics must now review its organizational culture and processes, believes its CEO. Priority will be placed on advanced manufacturing and high-end memory chips. Objective: to compensate for the time lost in the oh-so-essential sector of artificial intelligence.
As a reminder, the Korean giant has lost a quarter of its value since the start of the year…
- Operating profit at Samsung’s semiconductor business fell 40% in the third quarter.
- The company still shared some good news: its high-end memory chips will soon be ready for delivery to a major manufacturer. It is most certainly Nvidia.
- The overall net profit of Samsung Electronics is still increasing.
