Samsung Electronics Boosts AI-Centric Chip Supply, Eyes Q4 Demand as Semiconductor Profits Rebound

Samsung Electronics Boosts AI-Centric Chip Supply, Eyes Q4 Demand as Semiconductor Profits Rebound

Seoul, South Korea – Samsung Electronics reported a major advance in its supply of AI-centric chips on Thursday, aiming to reassure investors amid ongoing semiconductor market volatility. The tech giant revealed a 277% year-on-year surge in operating profit for the July-September period, reaching 9.18 trillion won ($6.65 billion), despite a 12% dip from Q2 primarily due to one-off costs, such as workforce incentives and the weaker U.S. dollar’s impact on the chip business.

Samsung’s semiconductor division posted an operating profit of 3.86 trillion won ($2.8 billion), marking a recovery from losses earlier in 2023 but falling significantly from Q2’s 6.45 trillion won ($4.67 billion). While Samsung saw solid demand for AI and server chips during the last quarter, its mobile chip business faced challenges due to inventory adjustments by some clients. Additionally, increased supply of older memory products from Chinese manufacturers impacted the market, adding pressure on pricing.

Crucially, Samsung lagged behind competitors like SK Hynix in the development of HBM3E chips—the latest generation of high-bandwidth memory essential for AI applications. However, Samsung is making strides to close the gap. Executive Vice President Jaeeun Kim announced on a conference call that Samsung has made “meaningful progress” in qualifying its HBM3E products with an undisclosed “major customer,” sparking speculation that Samsung may be finalizing a supply deal with Nvidia, a leading U.S. company in AI-optimized chip design.

Looking forward to Q4, Samsung expects memory demand to remain strong in AI sectors, even as mobile and PC memory demand may soften. “Amidst this backdrop, the company will focus on increasing sales of high-bandwidth memory and high-density products,” Samsung noted, underlining its strategic emphasis on next-gen memory solutions for artificial intelligence.

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