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Samsung Electronics has reported that a weak demand for memory chips will restrict profit growth in the present quarter, with its problems being tightened by US restrictions on the availability of advanced semiconductors, that are utilized in the hardware for artificial intelligence.
The South Korean company said on Friday that the demand for general storage will start to start out leisure within the second quarter. If disenchanted, the stocks decreased by around 2.5 percent.
“In the primary quarter of 2025. . The improvement of the general income might be limited on account of the weakness within the semiconductor business, ”said Samsung, the world's largest memory chipmaker, in a press release.
Kim Jae-June, Executive Vice President of the Samsung storage business, added later: “In the primary quarter, there will likely be some temporary restrictions in our chip sales (high-born memory). We expect some effects on our HBM demand not only through US restrictions on exports of high-end chips, but in addition a shift in demand for improved chips by major customers. “
Samsung was under pressure after not driving the KI investment wave. The HBM AI chips haven’t won the talents of the talents produced by SK Hynix, nor has the approval of Nvidia, a crucial customer. Samsung was also hit hard by the sluggish dram chip cycle on account of its larger exposure to raw material chips and the rise of Chinese rivals equivalent to CXMT.
The SK Hynix shares went back as much as 12 percent on Friday morning when the markets were reopened after the New Year's break. The concerns had concerns that enormous expenses for data centers can have reached their peak. The Budget -Ai model from Deepseek panicked through future demand.
The managers of Samsung informed the analysts on Friday that the corporate had reduced its exposure to traditional memory haulders and concentrated more on chips with higher margins which can be utilized in AI servers, where demand is “still strong”. However, the foundry business with contract images remained weak, while the soft demand for chips utilized in smartphones and PCs.
The investment in memory chips can be just like the extent of last 12 months, it said. The company reported the whole capital expenditure of 53.6 TN ($ 37 billion) last 12 months, with the bulk to go to its chip unit.
Samsung has reorganized his team of engineers to strengthen his HBM competitiveness, but Nvidia boss Jensen Huang said this month that Samsung “develops a brand new design” to deliver HBM chips to his company, regardless that it was added that “you may and you may do it and you may do you and you may do and you may do and you may do and you may do work in a short time”.
For the primary time, SK Hynix Samsung overtook the quarterly win within the fourth quarter, which is on account of the management of the HBM turnover and can expect this 12 months. The Samsung Chip Division reported an operating profit of two.9 TN within the October December, which decreased by 26 percent in comparison with the previous quarter.
“Samsung has lost his leadership in HBMS and it seems as in the event that they are more exposed to Chinese competition,” said Sanjeev Rana, head of the Korea shares at CLSA.
“Hynix was more resistant because they’ve this huge a part of the income from the HBM demand, which is absolutely good,” he added. “China's production of raw material memory has increased and will take up in the approaching months. . . And there are also some concerns about this. “
