The company expected profits of 9.1 trillion won (US$6.8 billion), a substantial 274.5% increase from last year but still below market expectations due to struggles in leveraging demand for AI server chips.
Vice Chairman Jun Young-hyun of Samsung’s device solutions division issued the apology, citing concerns over Samsung’s technological prowess and future direction. The company’s management vowed to address the challenges and view the situation as an opportunity for resurgence.
“We have caused concerns about our fundamental technological competitiveness and the future of the company due to our performance falling short of the market’s expectations,” Jun Young-hyun stated.
“Many people are talking about Samsung’s crisis. We, who are leading the business, are responsible for all of this.”
Although profits are up year-on-year, they have fallen by nearly 13% from the previous quarter. Samsung also announced staff cuts in its Asian operations, which could affect up to 30% of overseas employees in some areas.
Analysts believe Samsung’s lag behind competitors like SK hynix in producing high bandwidth memory (HBM) chips for AI chipsets is a major factor contributing to these struggles.
Shares in Samsung dropped by 1.31% following the announcement, with the stock down nearly 30% over the last six months. Analysts, however, note that Samsung remains a critical player in the global supply chain, reducing the likelihood of a sharp decline in profits or sales in the immediate future.
Samsung will release its final earnings report later this month.
