Samsung Electronics (SSNLF, Financial) reported an impressive 277% increase in operating profit for Q3, reaching 9.18 trillion won ($6.65 billion). However, this figure marks a 12% decrease from Q2 due to unique costs and fluctuations in the dollar's price. The company also revealed notable advancements in its AI-focused semiconductor division, even as revenues in traditional chip segments declined.
Samsung's semiconductor division reported an operating income of 3.86 trillion won ($2.8 billion) this year, a 40% decrease from the second quarter's 6.45 trillion won ($4.67 billion). Despite this decline, the company experienced strong demand for AI and server chips. However, sales of mobile chips declined as clients cut back orders to reduce inventories, and Chinese competitors increased production of memory chips based on older technologies.
One of the highlight changes is that Samsung has made advancements in another important section: high bandwidth memory, particularly HBM3E for AI. This comes when they lag behind competitors such as SK Hynix in adopting this advanced technology area. Indeed, in a recent conference call, Exacom's Executive Vice President Jaejune Kim pointed to what he said was ‘a meaningful progress' in China in preparing for a supply of its HBM3E products to a major unnamed customer – believed to be US semiconductor company, Nvidia (NVDA, Financial).
In the future, Samsung expects mobile and PC memory demand to be variable but will continue to expand in AI applications. The strategic directional moves of the industry participants have created prospects that the company intends to utilize in the future, with a special emphasis on high bandwidth and high-density memory products to strengthen the market in the next quarter.
