Samsung Electronics, in its preliminary result, said it’s expecting sales revenue of approximately 79 trillion won or $58.57 billion during the third quarter of 2024.
The expected revenue of Samsung compares with 67.40 trillion won reported in Q3 2023 and 74.07 trillion won in Q2 2024.
Samsung is expected to release detailed third-quarter earnings results later this month.
Samsung has announced its third-quarter operating profit is expected to fall short of market expectations, citing delays in its AI chip business and increased competition from Chinese chipmakers.
The tech giant, known as the world’s largest memory chipmaker, is facing challenges in the booming AI market, lagging behind competitors like SK Hynix in supplying high-end chips to Nvidia, a leader in artificial intelligence, Reuters news report said.
For the three months ending September 30, Samsung estimates an operating profit of 9.1 trillion won ($6.78 billion). Though this marks a significant improvement from 2.43 trillion won in the same period a year earlier, it represents a decline from 10.44 trillion won in the previous quarter.
“We have caused concerns about our technological competitiveness, with some talking about the crisis facing Samsung,” said Young Hyun Jun, Vice Chairman of Samsung’s Device Solutions Division. He emphasized that the company is committed to overcoming these challenges and strengthening its long-term competitiveness in the semiconductor market.
Samsung’s earnings are being dragged down by delays in its high-bandwidth memory (HBM) chips, which are crucial for AI servers.
In 2024, the value of AI server market is forecast to reach $187 billion, representing 65 percent of the total server market, says TrendForce.
Samsung noted sales of its HBM3E chips to a key customer were delayed, allowing rivals, particularly Chinese manufacturers, to increase their supply of conventional chips. The growing competition in this space, coupled with Samsung’s reliance on lower-margin, traditional chips, has made the company more vulnerable to market shifts.
Samsung’s contract chip manufacturing business, which designs custom chips for other companies, is struggling to compete with Taiwan’s TSMC, the dominant player in the sector, which counts Apple and Nvidia among its major clients.
TSMC has reported sales revenue of $20.82 billion with operating margin of 42.5 percent during the second-quarter of 2024. TSMC is targeting third-quarter revenue of $22.4-23.2 billion with operating margin of 42.5 percent – 44.5 percent.
Despite the struggles in the semiconductor division, Samsung’s mobile division showed improvement, buoyed by strong sales of its flagship smartphones. Its display unit also saw growth, thanks to new model launches by major customers like Apple.
Baburajan Kizhakedath
