Seoul, South Korea — Samsung Electronics on Thursday reported progress on a major supply deal for artificial intelligence-focused chips, aimed at reassuring investors after a slowdown in semiconductor profits last quarter.
The South Korean technology giant announced that its operating profit for the July-September period rose more than 277% year-on-year to 9.18 trillion won ($6.65 billion). However, this figure was down 12% from the second quarter, with Samsung citing one-time costs such as providing incentives to employees in its computer chip business and the impact of a weaker U.S. dollar as main causes. .
Samsung’s semiconductor division posted an operating profit of 3.86 trillion won ($2.8 billion) in the quarter, recovering from a deficit in 2023, but an operating profit of 6.45 trillion won ($4.67 billion) in the April-June period. ) has decreased significantly.
Samsung saw strong demand for AI and server chips in the past quarter, but its mobile chip business suffered as some customers made inventory adjustments. The company said in a statement that increased supply of legacy memory products by Chinese manufacturers also impacted the market.
More importantly, Samsung fell behind major competitors such as SK Hynix in HBM3E, the latest generation of high-bandwidth memory chips used to power AI applications.
Samsung Executive Vice President Jaejoong Kim said on a conference call that the company recently made “meaningful progress” in the qualification testing process to offer its HBM3E product to unspecified “key customers,” which will allow Samsung Electronics He said that this could boost sales. Fourth quarter. Kim’s comments referred to speculation that Samsung is close to a supply deal with Nvidia, a major U.S. manufacturer that designs advanced chips that power AI.
“Mobile and PC memory demand may be weak in the fourth quarter, but growth in AI will keep demand at a solid level. “We will focus on promoting sales of wide memory and high density products,” Samsung said.
