Samsung's Outlook Dims Amid HBM Supply Struggles for Nvidia and Sluggish Consumer Chip Sales

On Wednesday, Samsung Electronics SSNLF announced its earnings guidance for the fourth quarter of 2024.

The company expects quarterly sales of $51.38 billion (75 trillion Korean won versus 67.78 trillion Korean a year ago) and operating profit of 6.5 trillion Korean won (versus 2.82 trillion Korean won a year ago).

Samsung reported sales of 79.1 trillion Korean won, and operating profit of 9.18 trillion Korean won in the third quarter of 2024.

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The cautious operating profit guidance marks pressure from research and development costs, and the ramp-up of manufacturing capacity for advanced semiconductors to cater to Nvidia Corp’s NVDA needs, Reuters reports.

Additionally, weakness in demand for conventional memory chips used in PCs and mobile phones also affected the profit forecast. The consensus for fourth-quarter operating profit stood at 7.7 trillion Korean won.

Lee Min-hee of BNK Investment & Securities flagged to Reuters the bottoming of chip demand and competition surrounding Samsung’s significant businesses.

SK Hynix scored over Samsung as Nvidia’s key high-bandwidth memory (HBM) chip supplier for artificial intelligence graphics processing units (GPUs).

Reportedly, Nvidia approved Samsung’s fifth-gen HBM3E chips, while the 12-layer HBM3E chips await approval. Samsung expects HBM3E chips to account for 60% of its HBM chip sales by the fourth quarter.

Prior reports indicated that SK Hynix sustained an HBM market share of over 52% in 2024, Samsung followed with 42.4%, and Micron Technology, Inc MU had over 5% of the market.

Morgan Stanley expects the HBM market to grow from $4 billion in 2023 to $71 billion in 2027.

Micron is one of Rosenblatt’s top picks for the first half of 2025 despite the loss of the Chinese market due to Washington’s semiconductor sanctions on China. Micron’s loss benefits Samsung as Chinese tech companies like Huawei and Baidu Inc BIDU stockpiled Samsung HBM chips.

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