Samsung Electronics issued a rare apology and acknowledged on Tuesday it was facing a \u201ccrisis\u201d over its technological competitiveness, reflected in a disappointing profit guidance, despite a global AI boom. Samsung said it expected third-quarter profits to rise to 9.1 trillion won ($6.8 billion), up 274.5 per cent from a year earlier, falling short of market expectations as the company struggles to leverage robust demand for the chips used in artificial intelligence servers. \u201cToday, we, the management of Samsung Electronics, would like to first say sorry to you,\u201d Samsung said in a statement signed by Jun Young-hyun, the vice chairman of its device solutions division. It said \u201cconcerns have arisen about our fundamental technological competitiveness and the future of the company\u201d because of the results. \u201cOur management will take the lead in overcoming the crisis [\u2026] We will make the serious situation we are currently facing an opportunity for a resurgence.\u201d The results are up around three-fold from the same period last year but down nearly 13pc from the previous quarter. The rare apology came about a week after the tech giant said it intended to reduce staff in some of its operations in Asia, describing the move as \u201croutine workforce adjustments\u201d. Bloomberg reported that the layoffs could affect about 10pc of the workforce in those markets, while other reports claimed the planned move could affect up to 30pc of overseas employees at some operations. Samsung has been lagging behind South Korea\u2019s SK hynix when it comes to high bandwidth memory (HBM) chips used in AI chipsets, which could be one of the biggest causes of the profit estimate released on Tuesday, said Kim Dae-jong at Sejong University in Seoul. \u201cGiven the circumstances, it appears that Samsung has also lost a significant number of (HBM-related) employees to SK hynix,\u201d Kim told AFP. The company was facing a \u201cgrave situation\u201d, he said. Shares in Samsung fell 1.31pc in afternoon trading in Seoul, with its stock down almost 30pc over the past six months. \u2018Expected decline\u2019The Samsung statement said management would \u201cquickly assess and make any necessary adjustments to our workplace culture\u201d. The firm is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-controlled conglomerates known as \u201cchaebol\u201d that dominate business in Asia\u2019s fourth-largest economy. Jene Park, a senior analyst at Counterpoint Research, said there had been \u201can expected decline\u201d in Samsung\u2019s memory sector, with delays in supply of the newest chips and general reductions in memory demand. Even so, a sharp profit or sales decline was unlikely in the near future, he said. \u201cSamsung plays a significant role in the global supply chain,\u201d Park said. The company\u2019s estimate for its sales for the third quarter was seen increasing 17.2pc on-year to 79 trillion won. Samsung is expected to release its final earnings report at the end of this month.<\/p>\n","protected":false},"excerpt":{"rendered":"
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