South Korea’s Samsung Electronics said on Thursday its operating profit rose 277% to $6.6 billion in the year, but missed expectations as it struggles to tap into demand for chips used in artificial intelligence servers.
The world’s largest memory chip maker posted an operating profit of 9.18 trillion won ($6.6 trillion) “mostly due to costs.”
It also noted in a statement that “the strength of Korean earnings against the US dollar has had a negative impact on the company’s overall operating earnings.”
While operating profit nearly tripled from a year ago, it missed market expectations and fell 12% from the previous quarter.
Revenue rose 17.35 percent to 79.1 trillion won ($57.2 trillion), the highest quarterly record, Samsung said.
The company is a subsidiary of South Korean giant Samsung Group, the largest of the family-controlled conglomerates that dominate business in Asia’s fourth-largest economy.
Semiconductors are the lifeblood of the world economy, used in kitchen appliances and mobile phones, cars and weapons.
The company’s semiconductor division posted $3.86 billion in operating profit, a sharp 40% decline compared to last quarter.
Samsung said its performance was down “compared to the previous quarter due to a reduction in the reversal of inventory valuation losses, one-time expenses such as providing incentives, and currency effects from a weak dollar.”
A rare apology
Samsung has fallen behind South Korean giant SK hynix in high-bandwidth memory (HBM) chips used in AI chipsets, with experts blaming poor results.
Earlier this month, Samsung’s management issued a rare and separate apology, acknowledging that the company was facing a “crisis”.
“The results that fell far short of market expectations have raised concerns about our core technological competitiveness and the company’s future,” Jun Young-hyun, vice president of the company’s device solutions division, said in a statement signed by the company.
“Our management will take the lead to overcome the crisis… We will turn the dire situation we are currently experiencing into an opportunity to recover.”
Samsung shares have fallen a whopping 33% since their July peak and the company has lost more than $120 billion in market value during that time.
Samsung shares rose 0.3% in early trading in Seoul on Thursday.
The rare apology came about a week after the tech giant said it planned to cut staff at some of its Asian operations, describing the move as a “routine workforce adjustment”.
Bloomberg reports that the layoffs could affect about 10% of workers in these markets.
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