Samsung's Profit Surges, But Falls Short Of Expectations Amid Chip Competition

Samsung’s profit surges, but falls short of expectations amid chip competition

BY Sophia Feona Cantiller

Sophia Feona Cantiller

Sophia Feona Cantiller, a cum laude graduate in Computer Science from the University of the Philippines, swapped coding bugs for content buzz.

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Published 8 Oct 2024

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text Photo by Samsung Memory on Unsplash

Samsung’s third-quarter operating profit fell short of analyst expectations despite an increase of 274% compared to the same period last year—as they seem to struggle to keep up with the increasing competition for both conventional and advanced chips and capitalize on the strong demand for more AI server chips.

This is due to their reliance on commodity chips for both PCs and smartphones, which makes them more vulnerable to fluctuations in demand and pricing. The company is also reportedly lagging behind SK Hynix in supplying high-bandwidth memory (HBM) chips to Nvidia.

Their failure to capitalize on the growing demand for AI chips is likely due to production capacity, technological limitations, and market competition. In September, Reuters reported that Samsung is also considering cutting jobs in some divisions by up to 30% to streamline operations, reduce costs, and focus on areas where they can compete more effectively.

Despite these challenges, Samsung remains a dominant player in the global semiconductor market.