Samsung Electronics published its earnings guidance for the third quarter of 2024 and announced that profits will be 10% lower than previously expected. The main reason is an unexpected slowdown in an unnamed major customer’s AI chip business, but the company did not elaborate.
Samsung revealed that profits in its mobile division improved from the previous quarter, which saw the launch of the foldable Galaxy Z Fold6 and Galaxy Z Flip6. The display division also saw an increase when Apple launched its iPhones, most of which feature Samsung panels.
(all units in KRW/USD) | Q3 2024 Income guidance |
Q2 2024 | QoQ change | Q3 2023 | YoY change |
Sale | 79 trillion/ 58.6 billion |
74.07 trillion/ 55 billion |
6.7% | 67.4 trillion/ 50 billion |
17.2% |
Business profit | 9.1 trillion/ 6.7 billion |
10.44 trillion/ 7.75 billion |
-12.8% | 2.43 trillion/ 1.8 billion |
274.4% |
Reuters quoted several analysts who also do not see profits improving this quarter. Samsung is still behind SK Hynix as its South Korean rival increases sales of HBM (high-bandwidth memory) chips, the main chips used for AI processing.
Samsung’s late response to the new technology craze has forced the company to rely on lower-margin traditional chips. This market is already slowly being infiltrated by competition from China as demand decreases.
Galaxy Z Flip6 (left) next to Z Fold6
Young Hyun Jun, vice chairman of Samsung’s Device Solutions Division, said: “These are testing times for the company.” He pledged to turn the challenge into an opportunity and focus on improving long-term technological competitiveness.