Islamabad, Oct 8: Samsung Issues Apology Following a “Grave Situation”. While the business struggles to capitalize on high demand for the processors used in artificial intelligence servers, Samsung said it projected third-quarter profits to rise to 9.1 trillion won ($6.8 billion), up 274.5% from a year earlier. However, the earnings forecast fell short of market expectations.
“We, the Samsung Electronics management, would like to sincerely apologize to you,” the company stated in a statement endorsed by vice chairman of its device solutions business Jun Young-hyun.
Samsung Names New Executive in Charge of Global SMT & Packaging Southeast Asia’s Semiconductor and AI Business. Because of the outcomes, it stated, “Concerns have arisen about our fundamental technological competitiveness and the future of the company.”
The initiative to resolve the situation will come from our management. We are going to turn the dire circumstances we find ourselves in right now into a chance for recovery.
While the results are down almost 13% from the previous quarter, they are up approximately three times from the same period last year. About a week after the internet giant announced plans to cut staff in some of its Asian businesses, citing “routine workforce adjustments,” the company issued a rare apology.
While some reports suggested the proposed shift might affect up to 30% of overseas staff at some locations, Bloomberg stated that the layoffs could affect roughly 10% of the workforce in such markets.
According to Kim Dae-jong from Seoul’s Sejong University, Samsung has been falling behind South Korea’s SK Hynix in terms of high bandwidth memory (HBM) chips, which are utilized in AI chipsets. This could be a major factor in the profit forecast that was revealed on Tuesday.
Kim stated, “Considering the situation, it seems that Samsung has also lost a sizable number of (HBM-related) employees to SK Hynix.” He went on to say that the company was in a “grave situation.” In Seoul’s afternoon trade, Samsung’s shares dropped 1.31%, bringing the company’s stock down over 30% over the previous six months.
Management would “quickly assess and make any necessary adjustments to our workplace culture,” according to a statement from Samsung.The firm is the flagship unit of South Korean powerhouse Samsung Group, by far the largest of the family-controlled conglomerates known as “chaebol” that dominate business in Asia’s fourth-largest economy.
According to Jene Park, a senior analyst at Counterpoint Research, there has been “an expected decline” in Samsung’s memory market due to general declines in memory demand and delays in the supply of the newest chips.
Nevertheless, he added it was doubtful that profits or sales would drop much anytime soon. According to Park, Samsung “plays a significant role in the global supply chain.” According to the company’s prediction, sales for the third quarter will reach 79 trillion won, an increase of 17.2% year over year. At the end of this month, Samsung is anticipated to deliver its final earnings report.
