Samsung's Q3 profit surges by nearly 280% to $6.6 billion
Samsung Electronics has posted a whopping 277% jump in its operating profit for the third quarter of 2024, hitting $6.6 billion. However, the number missed market expectations amid challenges in leveraging the demand for artificial intelligence (AI) server chips and a strong Korean won. Although nearly tripled from last year's number, the profit was down 12% from the previous quarter.
Samsung's semiconductor division reports 40% profit drop
Samsung's semiconductor division, a key sector for the global economy, saw a massive 40% drop in operating profit. The company blamed "a reduced reversal of inventory valuation loss compared to the previous quarter, one-off expenses such as the provision of incentives, and currency effects due to a weak dollar," for the decline. The downturn comes even as semiconductors are key components in everything from kitchen appliances and mobile phones to cars and weapons.
Samsung lags behind SK hynix in high bandwidth memory chips
Samsung has been lagging behind its South Korean rival, SK hynix, in the manufacturing of high bandwidth memory (HBM) chips for AI chipsets. This delay is seen as one of the reasons behind Samsung's disappointing financial results. In a rare move, Samsung management had apologized earlier this month, admitting that the company was in a "crisis" over results that didn't meet market expectations.
Samsung's market value and share price take a hit
Since its July peak, Samsung's shares have tanked by 33%, wiping out over $120 billion in market value. However, Samsung's shares rose slightly by 0.3% in Seoul on Thursday in early trading hours. The financial loss comes after the company announced plans to cut staff in some of its operations across Asia last week, as part of "routine workforce adjustments."
