Samsung apologises amid earnings miss and AI struggles

South Korean tech giant, Samsung, has issued an apology to its customers and investors after missing market expectations for its third-quarter earnings. The electronics giant reported a consolidated operating profit of KRW9.1 trillion ($6.64bn), falling short of the KRW10.33 trillion ($7.65bn) predicted by analysts. Despite this, the company’s sales saw a 6% rise compared to the previous quarter, totalling KRW79 trillion ($58bn).

Vice-chairman Jun Young-hyun expressed concerns over the company’s performance, emphasising the need to regain its technological competitiveness. The statement acknowledged Samsung’s struggle to keep up with market demands, particularly in the rapidly expanding AI chip sector, where rivals like Nvidia have surged ahead. Samsung’s stock fell a further 1.3%, compounding its 20% decline earlier this year.

Samsung has held the title of the world’s largest memory chipmaker for over 30 years but faces increasing competition in both traditional and advanced chip sectors. The delay in the launch of its high-bandwidth memory (HBM3E) chips has been one of the challenges contributing to its weaker performance, with rival SK hynix making significant gains.

Industry analysts highlight that Samsung’s slower response to the AI chip boom has made it more dependent on lower-margin legacy chips. The company’s memory and contract chip manufacturing divisions have both struggled against competition from Chinese manufacturers and Taiwan Semiconductor Manufacturing Company (TSMC). More detailed earnings figures are expected later this month.