The profit from Samsung Electronics' chips decreases by 40% compared to the previous quarter.

• On Thursday, Samsung Electronics reported third-quarter sales and operating profit that were slightly higher than anticipated.
• The semiconductor unit's third-quarter operating profit was 3.86 trillion won ($2.8 billion), a 40% decrease from the previous quarter.
• Despite the growth in demand for advanced chips due to artificial intelligence, Samsung reported that mobile and PC demand fell short.

On Thursday, Samsung Electronics reported third-quarter sales and operating profit that were slightly above its own expectations, but its chip business experienced a sharp decline in profit compared to the previous quarter.

The semiconductor unit's third-quarter operating profit was 3.86 trillion won ($2.8 billion), a 40% decrease from the previous quarter.

Samsung reported that inventory adjustments negatively impacted mobile demand, despite the strong demand for its artificial intelligence and conventional server products. Additionally, the company faced competition from the increasing supply of legacy products in China.

Samsung is the leading manufacturer of memory chips used in devices such as laptops and servers, and it holds the second position in the global smartphone market.

Samsung announced that while AI drove demand for advanced nodes from its foundry unit, mobile and PC demand underperformed. The Korean tech giant stated that the rebound in mobile and PC demand will be delayed, though interest in more advanced products will continue to grow, driven by AI investments.

This month, Samsung's results were compared with the earlier guidance it had provided.

• Revenue: 79.1 trillion won vs. 79 trillion
• Operating profit: 9.18 trillion vs. 9.1 trillion won

The guidance figures for Samsung's device solutions division were lower than the LSEG estimate for 11.456 trillion won in operating profit. Samsung Vice Chairman Jun Young-hyun, the new head of the division, apologized after the guidance release.

Samsung anticipates that the demand for these advanced chipsets will drive growth next year, and the company predicts that server demand will remain robust due to continued investments from tech companies.

The stock price of Samsung Electronics in the South Korean exchange has decreased by 24.71% in 2021.

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