Samsung Electronics (KRX:005930) did the rarest of things for a large corporation - it issued an apology to shareholders after a poor set of results. It did this while acknowledging it faces a potential crisis in its memory chip division.
Jun Young-hyun, the newly appointed head of Samsung’s semiconductor business, promised an overhaul, admitting delays in delivering high-bandwidth memory (HBM) chips for Nvidia processors, allowing rival SK Hynix to dominate the market.
Samsung also faces challenges from Taiwan Semiconductor Manufacturing Co. (TSMC) in custom chip production and increasing competition from Chinese memory chipmakers.
The company warned of "inventory adjustments" and rising competition, which contributed to a 1.8% drop in its shares, down over 20% this year. Samsung is also reviewing its organisational structure, laying off workers as part of a global reduction plan.
For the three months ended Septemeber 30, operating profit was estimated at $6.8 billion, undershooting the consensus that sat at $7.7 billion.
Fuller financial details are expected on October 31.