By Investing.com– Samsung Electronics Co Ltd (KS:005930) presented a weaker-than-expected third-quarter profit estimate on Tuesday, as an initial boost from artificial intelligence demand now appeared to be running out of steam.
The South Korean conglomerate said it expects operating profit for the quarter to September 30 of about 9.10 trillion won ($6.77 billion), which is weaker than Bloomberg estimates of 11.48 trillion won.
While the figure is a nearly fourfold jump from the 2.43 trillion won seen last year, it is weaker than Samsung’s second-quarter operating profit of 10.44 trillion won.
Consolidated sales are expected at 79 trillion won, up from 67.4 trillion won last year and 74.07 trillion won in the prior quarter.
Samsung is racing to catch up with smaller rivals SK Hynix Inc (KS:000660) and Micron Technology Inc (NASDAQ:MU) in producing advanced memory chips for use in AI applications.
While demand from the AI industry has boosted sales of its memory chips, especially those used in servers and data centers, Samsung has been grappling with slower demand for chips used in personal devices.
This trend has weighed heavily on sales of Samsung’s conventional DRAM chips, as has competition from foundries in China.