Samsung is working to catch up to rival SK Hynix Inc in high-bandwidth memory chips. — Bloomberg
SEOUL: Samsung Electronics Co posted its fourth straight quarter of profit decline in the holiday quarter after a long-awaited recovery in chip and electronics demand delivered few returns for the world’s biggest memory maker.
South Korea’s most valuable company said net income fell 74% in the last three months of the year to 6.02 trillion won after its mainstay chip operations posted a loss of 2.18 trillion won, bigger than what analysts projected.
A tax credit of 2.82 trillion won helped lift Samsung’s bottom line to nearly double what analysts had estimated. The company’s operating profit was 2.8 trillion won on sales of 67.8 trillion won, in line with preliminary figures revealed at the start of the month.
Shares fell as much as 1.4%, underperforming both the broader Kospi and the MSCI Asia Pacific Index.
Samsung is working to catch up to rival SK Hynix Inc in high-bandwidth memory (HBM) chips, which are used to help Nvidia Corp’s accelerators in training artificial intelligence (AI).
That has been one of the sector’s most promising markets.
“The share price is weak because its HBM lags behind SK Hynix and its foundry business is significantly behind Taiwan Semiconductor Manufacturing Co (TSMC),” said Lee Seung-Woo, an analyst at Eugene Investment and Securities.
“If Samsung improves on the two fronts, there may be expectations for better share price performance. But at the moment, there’s little expectation.”
Samsung said HBM sales rose by more than 40% in the December quarter and that memory demand showed signs of recovery, with mobile shipments expected to grow.
“We plan to pro-actively solidify our competitiveness as a leading HBM supplier,” said Kim Jaejune, executive vice-president in charge of Samsung’s memory business, adding that generative AI would drive demand.
Samsung’s scale would help it push ahead to an upgraded version of HBM in the latter half of the year, he said. — Bloomberg
