Samsung Electronics has issued a rare apology, acknowledging a “crisis” in its technological competitiveness, reflected in underwhelming third-quarter profit guidance. Despite the global AI boom, Samsung’s expected profits of 9.1 trillion won ($6.8 billion) fell short of market expectations.
In a statement, Vice Chairman Jun Young-hyun admitted, “Concerns have arisen about our fundamental technological competitiveness and the future of the company.” He pledged that management would “take the lead in overcoming the crisis” and transform the current challenges into an opportunity for resurgence.
Samsung’s struggles to leverage robust demand for AI server chips have raised concerns. The company lags behind SK Hynix in high bandwidth memory (HBM) chips, a crucial component in AI chipsets. Analyst Kim Dae-jong described the situation as “grave,” citing significant employee losses to SK Hynix.
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The apology comes amid reports of layoffs affecting up to 30% of overseas employees in some operations. Samsung’s shares have plummeted nearly 30% over the past six months, with a 1.31% decline in afternoon trading in Seoul.
Analysts attribute the decline to delays in supply of the newest chips and reduced memory demand. However, Jene Park from Counterpoint Research noted that a sharp profit or sales decline is unlikely, given Samsung’s significant role in the global supply chain.
As Samsung prepares to release its final earnings report later this month, the company’s estimated sales for the third quarter are expected to increase 17.2% on-year to 79 trillion won.
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