Samsung Electronics, the world’s highest memory chip maker, is expected to forecast its fourth-quarter profit growth to continue to decline as it strives to keep up with Nvidia’s strong demand for AI chips.
Samsung is also the world’s largest smartphone and TV set, and is expected to increase its operating profit to 8.2 trillion won (US$5.6 billion, about Rs 47,984 crore), with its low prices high in the quarter ending December as of December at Rs 2.8 trillion (about Rs ) a year ago.
Many analysts have cut their earnings estimates in recent weeks, some of whom expect operating profit to drop to 8 trillion won (about Rs 472.667 crore)
In October, the South Korean company took a rare apology for its disappointing third-quarter performance and said it was making progress in supplying AI chips to Nvidia.
However, it hasn’t provided any updates since then, and the delay in providing high-end chips to NVIDIA continues to weigh its benefits.
In November, Samsung replaced some executives in the chip division, while naming the co-CEO of its chip division and granting him direct control of its troubled memory chip business.
Samsung’s stock is South Korea’s most valuable stock, down 32% last year, lagging 10% behind losses in the wider market.
By contrast, Samsung’s cross-city rival SK Hynix, a major supplier of NVIDIA’s advanced AI memory chips, is expected to post record revenue in the fourth quarter, analysts said.
Price under pressure
Analysts say there is insufficient demand for traditional chips used in mobile phones and PCs and for rising production from Chinese competitors.
Last month, U.S. chipmaker Micron Technology predicted quarterly revenue and profits below Wall Street estimates, with lower stakes as weak demand for consumer-centric products impacting Samsung’s competitors’ business.
According to estimates by researcher Trendforce, the price of DDR4 DRAM chips used in personal computers fell as much as 13% in the fourth quarter and is expected to fall 15% in the quarter.
This offsets the positive impact of weaker local currencies, thereby increasing overseas repatriation income.
South Korean winners fell to their weakest levels in 15 years in December after martial law by President Yoin Suk Yeol sparked political unrest, with U.S. President-elect Donald Trump advocating higher tariffs on imports.
Analysts say Samsung’s business of making logic chips designed by customers such as Qualcomm (Qualcomm) is expected to continue to cause losses, weakening its chip revenue.
Samsung will announce estimates of fourth-quarter revenue and operating profit on Wednesday and plans to release detailed results, including a revenue breakdown for each business in late January.
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(This story has not been edited by Tech Word News’s staff and is automatically generated from the joint feed.)
