Samsung Q4 profit misses forecast on missteps in AI chips

A person walks previous a signboard of Samsung Electronics in entrance of the Samsung Electronics Nano Metropolis Hwaseong Campus in Hwaseong, Gyeonggi Province, July 8, 2024. Reuters-Yonhap

Samsung Electronics on Wednesday estimated its fourth-quarter working revenue greater than doubled from a yr earlier however missed market expectations as a result of lackluster efficiency in its high-end reminiscence chips for synthetic intelligence accelerators.

The world’s greatest maker of reminiscence chips anticipated an working revenue of 6.5 trillion received ($4.46 billion) for the three months resulted in December, up from 2.82 trillion received a yr earlier, the corporate stated in a regulatory submitting.

However the working revenue is 15.7 p.c decrease than the common estimate based mostly on a survey by Yonhap Infomax, the monetary knowledge agency of Yonhap Information Company.

On-quarter, working revenue retreated 29.19 p.c from 9.18 trillion received.

Amongst others, decreased gross sales in Samsung’s machine options division in control of reminiscence and foundry enterprise models weighed on the quarterly outcomes, the corporate stated in a proof be aware.

Additionally, sluggish demand for standard PCs, cellphones and residential home equipment affected the chip large’s total efficiency regardless of sturdy gross sales of high-capacity merchandise for servers, the be aware stated.

Samsung’s lower-than-expected working determine comes amid extended delays in securing Nvidia Corp.’s approval for its excessive bandwidth reminiscence (HBM) chips for AI computing.

Traders are preserving a watchful eye on whether or not Samsung will have the ability to meet up with its compatriot rival SK hynix within the HBM market.

Late final yr, Samsung made a uncommon apology for its disappointing leads to the chip enterprise division and performed a significant govt reshuffle to place an even bigger concentrate on high-end applied sciences and overcome ongoing enterprise challenges.

Income rose 10.7 p.c to 75 trillion received for the October-December interval from 67.78 trillion a yr earlier. The corporate didn’t disclose the information for web earnings within the steering.

For the entire of 2024, working revenue jumped almost fivefold to 32.73 trillion received from 6.57 trillion received the earlier yr, the submitting stated.

Income rose 15.9 p.c to 300.08 trillion received from 258.94 trillion received over the talked about interval.

On Wednesday, Samsung Electronics shares jumped 3.43 p.c to 57,300 received with native analysts noting its disappointing fourth-quarter figures had already been factored into its share value.

The chipmaker outperformed the broader Korea Composite Inventory Worth Index’s 1.16 p.c acquire.

Its closing earnings outcomes are set to be launched later this month. (Yonhap)