SEOUL, Oct 8, 2024 (BSS/AFP) - Samsung Electronics said Tuesday it expected third-quarter profits to jump almost three-fold, but fell short of market expectations as it struggled to leverage robust demand for chips used in artificial intelligence servers.

The firm is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-controlled conglomerates that dominate business in Asia's fourth-largest economy.

The tech giant said in a regulatory filing that its July-September operating profits were expected to rise to 9.1 trillion won ($6.8 billion), up 274.5 percent from a year earlier.

But that was almost 12 percent lower than the average estimate, according to South Korea's Yonhap News Agency, which cited its own financial data firm.

It is also down nearly 13 percent from the firm's operating profit of 10.44 trillion won in the previous quarter.

Sales, meanwhile, were seen increasing 17.2 percent on-year to 79 trillion won.

Samsung's management released a rare, separate statement on Tuesday to its customers, investors and employees, offering its apologies.

"Due to results that fell short of market expectations, concerns have arisen about our fundamental technological competitiveness and the future of the company," said the statement, which was signed by Jun Young-hyun, the vice chairman of the company's device solutions division.

"Many people are talking about Samsung's crisis... We will make sure that the serious situation we are currently facing becomes an opportunity for a fresh start."
Shares in Samsung fell 1.5 percent in Seoul on Tuesday.

Jene Park, a senior analyst at Counterpoint Research, said that there had been "an expected decline" in Samsung's memory sector.

"The downturn is attributed to delays in the supply of fifth-generation HBM (HBM3E) and a general reduction in memory demand," Park told AFP.

"In the smartphone business, sales of new foldable devices seem to be below expectations, as competition among foldable suppliers is becoming more intense."

Joanne Chiao, an analyst at Taipei-based research group TrendForce told AFP that in the foundry sector "the momentum for component stockpiling enters the off-season, capacity utilisation rates at various foundries are generally flat or slightly declining".

Samsung is expected to release its final earnings report at the end of this month.

The firm said last week it was planning to cut jobs in some of its Asian operations, describing the move as "routine workforce adjustments".

Bloomberg reported that the layoffs could affect about 10 percent of the workforce in those markets.