Samsung Electronics, the South Korean tech giant, announced that its net profit for the third quarter fell 38% compared to the previous year. However, it still managed to beat market consensus by more than tripling its profit from the previous quarter. The company’s semiconductor division significantly narrowed its losses, indicating a recovery in demand.
In the period ending September, Samsung recorded a net profit of 5.844 trillion won ($4.34 billion), compared to 9.389 trillion won a year ago and 1.724 trillion won in the previous quarter. Meanwhile, revenue for Q3 stood at 67.405 trillion won, with an operating profit of 2.434 trillion won, aligning closely with the company’s preliminary forecasts.
Although Samsung’s memory chip segment remained in the red for the third consecutive quarter, its losses diminished to 3.757 trillion won in Q3, compared to over 4.0 trillion won in the first and second quarters. On the other hand, the company’s smartphone and display-panel businesses performed strongly during this period, helping to offset losses from semiconductors.
Looking forward, Samsung anticipates continued improvement in the demand for memory chips throughout Q4 and into next year. The company attributes this positive outlook to new product releases from clients and the ongoing boom in artificial intelligence.
Additionally, there is expected to be sustained demand for powerful computing chips utilized in generative AI applications in the upcoming quarters.
To align its production capacity with market demand, Samsung has reduced semiconductor output to stabilize inventory levels and maintain favorable prices for memory chips. Simultaneously, it is focusing on increasing output capacity for AI chips and other high-end products.
Samsung announced that it predicts facility investment to reach a record annual figure of 53.7 trillion won in 2023, with 11.4 trillion won already spent in Q3.