Samsung forecasts Q4 profit miss amid struggle to supply Nvidia with AI chips

Samsung Electronics is expected to miss its fourth-quarter profit expectations due to challenges in supplying high-end memory chips for AI accelerators to Nvidia, amid competition from SK Hynix. Despite a projected 131% increase in operating profit from the previous year, the anticipated 6.5 trillion won falls short of the 7.7 trillion won forecast. The shortfall is attributed to rising R&D and manufacturing costs, as well as decreased demand for conventional memory chips used in PCs and smartphones. Samsung's stock initially fell but rebounded, as investors had anticipated the disappointing performance.

The company faces ongoing challenges in its core memory chip business, with lower utilization rates at its factories due to sluggish demand, particularly in the smartphone sector. Analysts suggest that while Samsung's competitiveness is a concern, chip demand may have bottomed out, and smartphone demand in China could improve. Meanwhile, SK Hynix is expected to report record profits, capitalizing on Samsung's struggles. Samsung plans to release a detailed breakdown of its fourth-quarter earnings at the end of the month.

Key takeaways

Samsung is expected to miss fourth-quarter profit expectations due to struggles in supplying high-end memory chips to Nvidia.
The company's profit was affected by increased R&D costs and lower demand for conventional memory chips.
Samsung's stock showed volatility but rebounded as investors anticipated the disappointing performance.
SK Hynix is benefiting from Samsung's challenges and is expected to report record profits.

Samsung forecasts Q4 profit miss amid struggle to supply Nvidia with AI chips - SiliconANGLE

Key takeaways

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