A global boom in AI chip demand last year fuelled investor hopes that chipmaker profits would match that surge. Yet one of the sector’s largest, Samsung, is set to report its smallest earnings haul in 15 years.
The South Korean chipmaker expects a 35 per cent drop in operating profit in the fourth quarter, according to guidance provided on Tuesday. That miss on market expectations marks the sixth straight quarter that operating profit has declined. Operating profit of Won2.8tn ($2.1bn) in the December quarter means its annual figure fell below Won6tn for the first time since 2008.
Part of the weakness is down to global trends. Consumers are buying fewer electronic devices, including smartphones, PC and TVs as economic growth slows and high inflation bites. The lingering effects of a semiconductor sector downturn that worsened early last year continues to weigh on overall demand for chips.