On October 31, South Korean chip giant Samsung announced its third-quarter 2024 financial results.Data showed that during the reporting period, Samsung's consolidated revenue reached 79.1 trillion won, a month-on-month increase of 7%; but operating profit fell to 9.18 trillion won, a month-on-month decrease of 12%; chip business profit plunged 40% month-on-month, mainly due to weak sales of traditional chips.

Since its competitors TSMC and SK Hynix both made profits in the third quarter, Samsung's "increase in revenue but not increase profits" during the same period caused further panic in the market.As the world's largest maker of memory chips, smartphones, and televisions, Samsung summed up two points after its poor performance: First, the decline in profits was due to intensified competition for electronic products during the peak demand season, combined with one-time employee incentives. The impact of a weak dollar; second, it will focus more on producing high-end chips in the future to improve the profitability of the chip division.

Judging from the three quarterly reports of various manufacturers this year, the participation of artificial intelligence has now become the lifeblood of chip manufacturers.Due to the continuation of the artificial intelligence craze, SK Hynix reported a record operating profit of 7 trillion won in the third quarter; TSMC also took advantage of Nvidia to achieve its best performance in history this quarter.For manufacturers that focus on traditional chips, their profits are constantly being squeezed, such as Samsung, Intel, AMD, etc., which have had a difficult time in the near future.

To make matters worse, even the track for high-end chips is now basically saturated.Sources said that although Samsung intends to make efforts on high-end chips closely related to artificial intelligence, Samsung chose to postpone receiving the high-end chip manufacturing equipment provided by Asmail because it did not win any major customers.Originally, these devices would be used for chip production at Samsung's Texas factory.

However, the timing of Samsung's business upgrades has reached an urgent stage.At present, Samsung needs to work hard to compete with rivals not only in its main memory chip business, which Samsung is good at, but also in its logic chip foundry business that it designs and produces for other customers.Especially in the field of logic chips, Samsung's losses are expanding.Samsung said that in the future, it must promote sales of high-bandwidth and high-density artificial intelligence chips to recover losses in the chip division.

Analysts said Samsung lost in the third quarter because it did not effectively commercialize high-bandwidth memory chips like its competitors, resulting in the company's third-quarter earnings report and fourth-quarter performance outlook being lower than market expectations.However, business adjustments are difficult to achieve overnight. Even if Samsung focuses on high-end chips from now on, it is expected that it will take some time to achieve ideal business performance.

Affected by lower-than-expected results, Samsung fell 0.2% in early trading Thursday, and South Korea's stock market fell 1.3%.