The phone maker company manages to have a significantly smaller operating profit, falling behind its rivals SK Hynix, to supply Nvidia company with the high-end chips.
This year most of the company’s earnings were implemented in research and other development actions in order to improve the overall manufacturing capacity for its advanced chips. Also, according to the company’s statement, Samsung Electronics experienced a slowing demand for the standard memory chips that are used for the manufacturing process of mobile phones and PCs. However, the phone maker did not provide any details about the progress in supplying Nvidia with artificial intelligence HBM chips.
In Q4 which ended on December 31, Samsung Electronics company has reported an estimated operating profit of about $4.47 billion which is equivalent to 6.5 trillion won. The initial LSEG estimate was about 7.7 trillion won, a number that is well above the actual Q4 reports.
It should be mentioned that the estimated result was 131% higher compared with the same period of last year but at the same time was 29% lower than the previous quarter of the company. While the previous quarter had a significantly higher performance than the current quarter estimates, it was still a disappointing performance for the world’s largest memory chip, smartphone, and TV maker.
At that time, the Samsung company stated that the company was working hard to maintain the progress in supplying HBM Samsung chips of the giant Nvidia. But since that statement, the company didn’t provide any further details about the situation.
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According to the Nvidia CEO, Jensen Huang, Samsung Electronics company must create a new design of the HBM in order to be able to supply the Nvidia company, as reported by Korea JoongAng.
"I think it will take time for Samsung to supply HBMs to Nvidia,", Greg Noh, the analyst at Hyundai Motor Securities stated.
"We knew that the Q4 performance was bad, so I should say that it was reflected (in the stock price) to some extent. There are concerns about Samsung's major businesses continuing to lose competitiveness. But chip demand may have bottomed already,", Lee Min-hee, the analyst from BNK Investment & Securities stated about the Samsung Electronics situation.
Also this Wednesday, the Samsung company announced that the earnings from the logic chip design and contract manufacturing business declined as a result of the slower mobile phone demand along with increased research and development costs.
Stay tuned for more updates!
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