Samsung apologizes for lower-than-expected semiconductor business performance

Samsung Electronics announced third-quarter earnings that fell below market expectations, with an operating profit of 9.1 trillion won. The semiconductor business's top management issued a rare apology, pledging to overcome the crisis through reform and innovation.

On Tuesday, Samsung Electronics announced preliminary results of 79 trillion won in sales and 9.1 trillion won in operating profit for the third quarter on a consolidated basis. Sales rose 6.7% from the previous quarter, recording the highest-ever quarterly sales, but operating profit fell 12.8% compared to the second quarter. Operating profit was below the forecasted consensus of 10.77 trillion won by financial analysts. The momentum for improved operating profit, which had continued for six consecutive quarters since the first quarter of last year, also slowed down.

Unlike the confirmed results, which will be announced at the end of this month, the provisional results do not include performance by business divisions such as semiconductors, smartphones, TVs, and home appliances. Samsung Electronics explained that one-time costs such as provision for performance bonuses in the semiconductor business (DS) division and performance impacted by inventory adjustments of some customers affected the semiconductor business.

Samsung Electronics Vice Chairman Jun Young-hyun of the DS division issued a rare apology, saying, “We apologize for causing concerns by our performance that did not meet market expectations,” in response to the lower-than-expected performance amid the semiconductor and AI boom. This is the first time Samsung Electronics' top management has issued a separate statement regarding its performance. “All responsibility lies with the management leading the business, and the management will take the lead in overcoming the crisis and create opportunities to move forward,” Vice Chairman Jun hinted at major reform.


홍석호 기자 will@donga.com