Samsung’s chip division underwhelms in costly AI memory race
Jerry
Samsung Electronics Co.’s pivotal chip division reported a smaller-than-expected profit as the company fights to close the gap on archrival SK Hynix Inc. in the artificial intelligence arena.
That push resulted in getting long-delayed approval for Samsung’s supply of 8-layer HBM3E — a less advanced variety of the high-bandwidth memory that SK Hynix supplies — from Nvidia Corp. for use with AI processors tailored for the Chinese market.
But the effort, along with exposure to legacy DRAM, is weighing on South Korea’s largest company. Samsung’s semiconductor unit reported operating profit of 2.9 trillion won ($2 billion) for the December quarter, missing analysts’ average projections. It also forecast limited earnings growth in the current quarter. The company’s net income came to a bigger-than-expected 7.58 trillion won ($5.23 billion), thanks to a boost from its network business.
The stock price of Samsung fell 2.4% on Friday, the first trading day in Seoul after the Lunar New Year holiday. SK Hynix shares dropped 9.9%, reflecting in part concern that DeepSeek’s low-cost AI would upend the entire premise of big spending on data centers and powerful chips.
Source: FORTUNE
