Samsung Electronics Predicts Lower Profits Due to Market Challenges
Samsung Electronics has issued a warning about a significant drop in its third-quarter profits. This prediction is attributed to several factors, including one-time costs and increased competition from Chinese rivals in the memory chip market.
The South Korean tech giant estimates its operating profit for the quarter ending in September to be around 9.10 trillion won ($7.6 billion). While this represents a 274% increase from the previous year's 2.43 trillion won, it still falls short of earlier expectations.
Samsung's memory business, a key source of revenue, has been impacted by "one-time costs and negative effects." These include inventory adjustments by mobile customers and a surge in the supply of legacy products by Chinese memory companies.
The company also reported delays in shipments of HBM3E chips to major customers. These high-performance memory chips are used in devices like laptops and servers, and Samsung is a leading manufacturer in this field.
Following the release of the earnings guidance, Samsung's share price dropped by an additional 0.7%. This adds to the year-to-date decline of over 24.12%.
The company's challenges highlight the increasingly competitive landscape in the technology industry, particularly in the memory chip market. With Chinese rivals ramping up production and global economic uncertainties looming, Samsung faces a crucial period to navigate these challenges and maintain its market position.