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After losing Nokia, crisis-hit Intel seeks network assets buyer
Nokia is substituting Arm-based chips for Intel silicon in its latest 5G products amid talk of a possible Ericsson takeover of Intel assets.
Samsung 's mobile business declines, with networks revenue plunging 28%, as it struggles to reap benefits from AI.
Samsung Electronics gave investors a spark of hope in an otherwise cheerless Q3 result Thursday with a hint it may be close to qualifying as an Nvidia supplier.
Its failure to win a piece of the AI leader's lucrative HBM chip business is one of a string of misses by the Korean conglomerate, which has slashed 25% off its stock price in the last ten weeks.
Kim Jae-june, vice president for memory business, told an earnings call the company had made "meaningful progress" in certification tests for an unnamed major customer – presumed to be Nvidia.
He said the company was expanding sales of the premium eight- and 12-layer HBM3E chips.
Samsung said HBM sales grew 50% in the quarter and would accelerate further in the second half, aided by the launch of HBM4. But its core semiconductor business numbers came in well below expectations. The chip division reported an operating profit of 3.9 trillion Korean won (US$2.83 billion), down 40% from Q2, and a long way short of the KRW6.7 trillion ($4.86 billion) anticipated by a Bloomberg analysts' poll.
Rival's record
It attributed its result to one-off costs, such as incentive charges and currency effects due to a weak dollar.
But it's an embarrassing contrast with SK Hynix, an Nvidia supplier, which reported a record KRW7 trillion ($5.1 billion) operating profit last week, marking out the size of the opportunity Samsung is missing out on as well as its rival’s growing dominance.
SK Hynix's stock has spiked 60% in the past 12 months as it has piled into the AI business, where some ASPs (average selling prices) are under pressure to rise further.
Samsung is being punished by investors not just for being unable to keep up in HBM, but also in the foundry market, where it has struggled to make gains against heavyweight TSMC.
Earlier this month, Jun Young-hyun, Samsung vice-chairman and head of the chip business, issued a rare apology for "our performance falling short of the market's expectations" and acknowledged a looming "crisis."
Samsung's important mobile unit also declined in Q3, with operating profit dropping 14.5% to KRW2.8 trillion ($2 billion) and total sales up just 3% over last year.
Its network business had another tough quarter as carriers kept a tight lease on capital spending. Network sales slumped 28% to KRW540 billion ($392 million), although it predicted improved demand in the coming quarter.
Samsung's stock closed 0.17% higher in Thursday trading.
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