Samsung Misses Expectations in the Chip Segment - Is a Strategy Change Necessary?

During the September quarter, Samsung Electronics reported an impressive net profit of 9.78 trillion won, exceeding analysts' expectations. However, the tech giant's core business, the chip segment, fell short. The chip division, typically the most profitable part of the company, posted an operating profit of 3.86 trillion won, significantly below the 6.7 trillion won forecasted by market observers. The setback in the area of high-performance memory modules is partly due to challenges in certifying new chips by Nvidia. This has opened a window for competitors like SK Hynix and Micron Technology to take the lead in the lucrative high-bandwidth memory market. Notably, SK Hynix recently reported a record operating profit. Despite strong demand in the fields of artificial intelligence and data center servers, Samsung is suffering from weak demand in the mobile sector and the increasing supply of older chip models in the Chinese market. For the fiscal year, the company plans capital investments of 47.9 trillion won to boost the sales of its advanced HBM3E products. While Samsung's shares in Seoul fluctuated slightly, the company feels internally compelled to change. Jun Young-hyun, head of the chip division, emphasized the need to rethink the company's culture and processes. Layoffs in Southeast Asia, Australia, and New Zealand are part of a global downsizing strategy to regain economic success.