(Bloomberg) — Samsung Electronics Co.’s pivotal chip division reported a smaller-than-expected profit as the world’s largest memory chipmaker fights to narrow the lead arch-rival SK Hynix Inc. has in the artificial intelligence arena.
Most Read from Bloomberg
The Suwon-based company’s semiconductor unit reported operating profit of 2.9 trillion won ($2.1 billion) for the December quarter, falling short of analysts’ average projection for 4.78 trillion won. That compares with the 3.86 trillion won operating profit in the previous quarter. Its shares were down more than 3% on Friday.
South Korea’s largest company, which gave disappointing preliminary operating profit and revenue numbers earlier this month, said net income came to 7.58 trillion won, beating the analysts’ estimate of 7.05 trillion won.
Smaller rival SK Hynix, the main supplier of AI chips to Nvidia Corp., posted record quarterly income earlier this month, eclipsing Samsung’s operating profit for the first time. Hynix said HBM made up 40% of its overall DRAM chip revenue in the quarter and it expects HBM sales to more than double this year.
Samsung’s 8-layer HBM3E — a less advanced HBM3E variety — was cleared by Nvidia in December, Bloomberg reported earlier. Samsung is supplying those chips for Nvidia’s specialized version of its AI processors tailored for the Chinese market, one of the people said.
Samsung has been stepping up spending on research and development and front-end capacity expansion in its efforts to catch up with SK Hynix and Micron Technology Inc. in the AI chip arena. At the same time, it’s facing weakened demand for its conventional semiconductor chips for PCs and mobile devices. Its smartphones, TVs and other appliances are also facing growing competition, while the operating rate in its foundry business dropped, the company said earlier this month.
Investors remain concerned about Samsung’s ability to claw its way back into the market for high-bandwidth memory chips, designed to work with Nvidia’s AI accelerators. The company has struggled to get its latest products certified by Nvidia — providing an unusually long window for SK Hynix and Micron to carve out commanding leads in the booming HBM market.
Samsung’s underwhelming quarterly performance comes after Chinese startup DeepSeek roiled markets after its AI model appeared to match OpenAI’s capabilities at a fraction of the cost. South Korean markets reopen on Friday after a lunar New Year holiday this week.
–With assistance from Vlad Savov.
Most Read from Bloomberg Businessweek
©2025 Bloomberg L.P.
EMEA Tribune is not involved in this news article, it is taken from our partners and or from the News Agencies. Copyright and Credit go to the News Agencies, email news@emeatribune.com Follow our WhatsApp verified Channel