In a rare moment of contriteness, Samsung has apologized for its tanking revenues and AI chip delays.
The head of the company’s chip business, Jun Young-hyun, faced investors and admitted that the company is simply not keeping up in the AI chip space.
The frank statement comes as rival NVIDIA rides high with quick fire AI chip launches and news that it is building a superchip facility in Mexico.
Overhaul Promised
“The leadership team at Samsung Electronics wishes to apologize for not meeting your expectations with our performance,” Jun said in his statement, reported by Bloomberg and Ars Technica.
He also didn’t sugarcoat the company’s plight in light of worse-than-projected revenue and profit. “We have caused concerns about our technical competitiveness, with some talking about the crisis facing Samsung. As leaders of the business, we take full responsibility for this” he said.
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Falling Share Price
The apology was issued just after the company reported a lower-than-expected operating profit, down nearly 13% from the second quarter of the year. Samsung has also seen its share price fall almost 30% since the beginning of the year.
The company has also let thousands of workers go compounding fears that it is simply not able to keep up with rivals.
AI Gold Rush
Samsung’s biggest woe has been delays in delivering a high bandwidth AI chip – the kind produced by SK Hynix, which NVIDIA uses in its processors for training AI as well as custom-made chips. This has allowed competitors to hustle for market dominance.
The results from Samsung are also in stark contrast to those of US chip manufacturer, Micron Technologies, which has seen its stock surge.
Market Warnings
While Jun is promising sweeping changes at the Korean company, the news comes as Morgan Stanley has warned that a memory market winter is coming. Those within the semi-conductor industry have claimed the prediction is unfounded and remain upbeat.
“At Samsung, we have a deep and proven history of overcoming difficulties and of turning them into key opportunities. Rather than relying on short-term solutions, we will focus on reinforcing our long-term competitiveness.”
Meanwhile investors will be keeping their eyes on Samsung’s share price in light of both the revenue announcement and the apology. And Samsung will now be going hard after the certification it needs for its AI chips.
