In an unusual move, Samsung Electronics issued a lengthy apology after reporting disappointing financial results, highlighting its struggles in the competitive AI chip market.
Jun Young-hyun, the newly appointed head of Samsung’s chip division, stated that the company will review its organizational culture and processes to improve competitiveness. “Instead of relying on short-term fixes, we will concentrate on strengthening our long-term position,” he said. “These are challenging times.”
Samsung, the world’s largest manufacturer of memory chips and smartphones, announced a preliminary operating profit of approximately 9.1 trillion won (about $6.8 billion) for the September quarter, falling short of the anticipated 11.5 trillion won. The company attributed part of the shortfall to a one-time expense related to performance bonuses.
Total revenue was reported at 79 trillion won, below the expected 81.57 trillion won.
A comprehensive financial statement, including net income and divisional details, is expected later this month.
“We have raised concerns about our technical competitiveness, with some referring to a crisis at Samsung,” Jun admitted. “As leaders of the business, we accept full responsibility for this.”
In response to the announcement, Samsung’s stock dropped as much as 1.8% in morning trading in Seoul. The company’s shares have plummeted more than 20% this year as it struggles in key markets, falling behind competitor SK Hynix in memory chips designed for Nvidia’s AI processors and lagging against Taiwan Semiconductor Manufacturing Company in custom chip production.
Analysts have recently downgraded their price targets for Samsung, with Macquarie cutting its rating from outperform to neutral and reducing its target price to 64,000 won.
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