By SEOUL (Reuters) -Samsung Electronics estimated on Tuesday its third-quarter operating profit jumped 274%, but that was short of analysts’ estimates as the tech giant struggled to capitalise on strong demand for chips used in artificial intelligence servers.
The world’s largest memory chip, smartphone and TV maker estimated an operating profit of 9.1 trillion won ($6.78 billion) for the three months ended Sept. 30, versus a 10.3 trillion won LSEG SmartEstimate.
That would compare with 2.43 trillion won in the same period a year earlier and 10.44 trillion won in the preceding quarter.
Samsung (KS:005930)’s share price, which has fallen more than 20% so far this year, fell 0.7 % after the earnings guidance.
Earnings declined in the company’s memory chip business as Chinese chip rivals increased supplies of “legacy” products” and some mobile customers adjusted inventories, offsetting solid demand for high bandwidth memory (HBM) and other chips used in servers, Samsung said in a statement.
The company has been the world’s biggest memory chipmaker for three decades but it increasingly faces competition in both conventional and advanced chips.
High-margin chips used in AI servers are driving a recovery in the chip market after a post-pandemic downturn last year. Still, Samsung has lagged behind SK Hynix in supplying high-bandwidth memory (HBM) chips to AI leader Nvidia (NASDAQ:NVDA).
Demand remains lacklustre for commodity chips used in PCs and smartphones upon which Samsung relies more than rivals, analysts said.
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