Samsung's quarterly profit expected to increase significantly due to chip demand, but facing challenges in AI market.

From Investing.com: 2024-10-06 19:40:32

Samsung Electronics is poised to reveal a more than four-fold increase in quarterly profit, driven by chip demand. Operating profit likely hit 10.33 trillion won, up from 2.43 trillion won last year. Recovery in AI chip market is strong, but Samsung’s sluggish response may impede growth.

Samsung is facing tough competition from SK Hynix and Micron in the AI chip market, while Chinese rivals pose a threat in commodity chips. The company’s chip division is expected to see a 15% drop in operating profit from the previous quarter. The slow response to the AI chip market could impact Samsung’s position as top DRAM vendor.

Micron outperformed with strong Q1 results, attributing the success to booming demand for memory chips in the AI sector. Samsung’s non-memory chip operation is struggling, facing competition from TSMC. The company is cutting up to 30% of its overseas staff due to challenges.

Sales of Samsung’s premium foldable phones are expected to disappoint, adding pressure on the company amidst increasing competition from Huawei. Samsung Electronics’ shares fell 23% this year, while the rival SK Hynix saw a 23% increase. The firm will release its preliminary third-quarter earnings soon.



Read more at Investing.com: Samsung’s profit recovery seen weakening in Q3 By Reuters