Samsung Electronics reported slightly higher sales and operating profit than its own expectations in the third quarter, but its chip business reported a significantly lower profit than in the second quarter.
The semiconductor unit reported an operating profit in the third quarter of about 3.86 trillion won, or about $2.8 billion, down about 40 percent from the previous quarter.
While the memory chip unit benefited from strong demand for AI products and traditional servers, Samsung said inventory adjustments negatively impacted demand for mobile devices, and the company said it was also competing with increased supplies of legacy products in China.
Samsung is the largest manufacturer of memory chips used in devices such as laptops and servers, and is the second-largest player in the smartphone market worldwide.
Artificial intelligence has driven demand for advanced nodes from its foundry unit, with Samsung saying demand for mobile devices and personal computers has been weak.
Meanwhile, the Korean tech giant said the recovery in demand for mobile devices and personal computers will be delayed, although interest in more advanced products will continue to grow, driven by investments in artificial intelligence.
Here are Samsung's results compared to the guidance it issued earlier this month:
Revenue: 79.1 trillion won vs. 79 trillion won
Operating profit: 9.18 trillion won vs. 9.1 trillion won
The figures were significantly lower than the London Stock Exchange’s estimate of 11.456 trillion won in operating profit. Samsung Vice Chairman Joon Yong-hyun, the new head of the company’s device solutions division, issued a rare apology after issuing the guidance.
Shares of Samsung Electronics Co., listed on the South Korean stock exchange, have fallen 24.71% so far this year.
