Samsung Electronics apologizes for ‘disappointing profit forecast’

On October 8, Korean electronics giant Samsung Electronics said its third-quarter operating profit could be around 9,100 billion won (6.78 billion USD), up 274% over the same period last year. However, this figure is lower than the forecast of analysts in a survey by financial services firm LSEG (10,300 billion won) and lower than the second quarter (10,440 billion won).

Analysts are less optimistic with this information. “Look at the figures, it’s very disappointing. Samsung is not gaining market share as quickly as before. That’s a big problem,” said Daniel Yoo – Director of Global Asset Distribution at Yuanta Securities Korea. CNBC.

“The profit figures were a shock compared to what the market expected,” Lee Min-hee – analyst at BNK Investment & Securities told Reuters.

Soon after, Vice President of Device Solutions at Samsung Electronics Jun Young-hyun issued an apology to “customers, investors and employees”. The media commented that this was a rare move.

“We have raised concerns about the company’s technological competitiveness and future, due to its performance not meeting market expectations. A lot of people are talking about a crisis at Samsung. We – Those who are leading businesses – take responsibility for all of this,” he wrote.

However, he affirmed that “Samsung always turns crises into opportunities” and has overcome many similar challenges. Samsung leaders are committed to restoring technological competition, better preparing for the future, and reviewing organizational culture and operating procedures for timely corrections. He called on everyone to “support and cheer for Samsung Electronics to once again prove its strength.”

Samsung explained the decline in the performance of the memory chip segment due to “one-time costs and some negative effects”, such as inventory adjustments and increased supply of old technology chips from Chinese companies. Deliveries of HBM3E broadband memory chips to major customers will also be delayed.

Samsung Electronics is currently the world’s largest memory chip manufacturer, and the second largest smartphone company globally. Later this month, the company will announce official business results.

Analysts predict that Samsung’s chip processing segment may lose money in the third quarter, due to competition from TSMC – the company that currently produces chips for Apple and Nvidia. Analysts at Macquarie Equity Research said that Samsung needs to be “flexible in controlling memory chip supply, as the decline in demand for traditional DRAM memory will affect the company more than its smaller competitors.”

Last month, Reuters Quoting close sources, Samsung has directed its branches globally to reduce staff in some departments by 30%. Samsung Electronics shares this year have dropped 24%.