Samsung Electronics’s third-quarter profit is anticipated to be lower than expected due to its slower supply of flagship chips to a leading company in the AI market, Nvidia.
Samsung announced that a delay hit its AI chip business with an unidentified major customer. In contrast, Chinese chip rivals boosted supplies of conventional chipsets, contributing to the decline in its semiconductor earnings.
Undoubtedly, Samsung has been one of the world’s biggest memory chipmakers for the last three decades, but it is increasingly struggling to compete with rivals in both conventional and advanced chips.
The company estimated its third-quarter operating profit to be 9.1 trillion won, but unfortunately, it was lower than the estimated 10.3 trillion won. That would compare with 2.43 trillion won in the same period last year and 10.44 trillion won in the preceding quarter.
Noticeably, Samsung has been slower as compared to SK Hynix in supplying HBM chipsets to Nvidia. The AI server chipset market is rebounding positively after a decline last year, driven by high-margin chips.
According to analysts, the demand remains uninspired for commodity chipsets used in PCs and smartphones, upon which Samsung depends more than its rivals. This suggests that to maintain its leading legacy, Samsung needs to take more advanced and convenient steps to give tough competition against its rivals.
