INTERNEWSTIMES.COM – Samsung Electronics, the world’s leading maker of memory chips, smartphones, and TVs, is set to report a significant jump in quarterly profit, driven by improving demand for chips. However, the company’s recovery is losing steam as it struggles to capitalize on the booming artificial intelligence (AI) market.
Analysts predict Samsung’s operating profit for the quarter ending September 30 will reach a staggering 10.33 trillion won ($7.67 billion), a four-fold increase from the previous year. Despite this impressive growth, the figure is only slightly higher than the previous quarter’s 10.44 trillion won, indicating a slowing recovery.
The global semiconductor market has rebounded from last year’s downturn, fueled by demand for chips used in AI servers. However, demand for conventional chips used in smartphones and PCs is weakening, posing a challenge for Samsung.
The South Korean tech giant is scrambling to catch up with smaller rivals like SK Hynix and Micron in the race to supply high-end AI chips to companies like Nvidia. Meanwhile, Samsung faces growing competition from Chinese rivals in the commodity chip market.
Samsung’s chip division, traditionally a major profit driver, is expected to swing to an operating profit of 5.5 trillion won, but this is a 15% decline from the previous quarter. The company’s late entry into the higher-margin AI chip market and its heavy reliance on China and traditional mobile chips have left it vulnerable to geopolitical risks and sluggish demand.
Analysts warn that Samsung’s dominance in the DRAM (dynamic random access memory) market, crucial for computers and smartphones, could be threatened by a potential glut in conventional DRAM supply. This could hurt Samsung more than its competitor, SK Hynix.
The downbeat forecast comes as Micron reported record quarterly revenue, driven by booming demand for its AI-focused memory chips. This stark contrast highlights the challenges Samsung faces in navigating the evolving chip market, where AI is rapidly becoming the driving force.
Samsung’s ability to successfully adapt to the AI boom will be crucial for its future success. The company’s next moves in the AI chip market will be closely watched by investors and industry experts alike. (Red)
