Profitability fell in the semiconductor unit
The third quarter 2024 earnings report announced by Samsung revealed that the operating profit of the company’s DS division was 3.86 trillion KRW ($2.8 billion), which was lower than the expected 4.2 trillion KRW ($3.05 billion). Profit in this quarter also fell 40 percent compared to the second quarter. The contraction in the company’s HBM business indicates that it is not attracting interest, especially from artificial intelligence giants such as Nvidia. This situation has seriously weakened the company’s competitiveness in the HBM market. SK Hynix and Micron are currently ahead of Samsung in the HBM market. HBM memories are used in Nvidia and AMD’s AI GPUs.
There is hope for a return
However, there are also promising developments regarding Samsung’s HBM targets. The company announced that the HBM3E will go into mass production this quarter, and that the product will account for more than 50 percent of total HBM sales in the fourth quarter. Additionally, Samsung is expected to supply Nvidia in the fourth quarter but admits there have been delays due to quality control issues. HBM4 is planned to be released in the second half of 2025.
There are also positive developments regarding Samsung’s cloud business unit. The company states that they have made significant progress especially with 2nm GAA technology. Samsung has begun providing “SDK kits” so potential customers can integrate the technology into their product designs, and plans to go into mass production in fiscal 2025.