Samsung Apologizes For Bad Financial Performance

Samsung Electronics has issued an apology to customers, investors and employees after releasing disappointing preliminary results Tuesday.

"The performance that fell short of market expectations has raised concerns about the fundamental technological competitiveness and the future of the company," wrote vice chairman Jeon Young-hyun, who runs the Korean giant's chip business.

"All of this responsibility lies with us who are leading the business," added Jeon.

The vice chairman claimed he was confident things will improve and outlined three strategies for making it happen. They include a focus on long-term advancements rather than short-term fixes, rekindling passion for innovation, and re-examining organizational culture to allow for more open communication.

"I believe that only new technologies that do not exist in the world and perfect quality competitiveness are the only ways for Samsung Electronics to make a comeback," declared Jeon, in a rare mea culpa.

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Samsung Electronics preliminary Q3 2024 results, posted the same day as the apology, reported consolidated profit of ₩9.1 trillion ($6.8 billion).

Although that number represents an almost 275 percent increase year-on-year, it missed expectations of profit topping ₩10 trillion ($7.4 billion).

Consolidated sales came in at ₩79 trillion ($58.6 billion) – an increase of 17.2 percent year-on-year.

Full results will be released October 31.

Official said Samsung’s memory business was a problem in the quarter, with one-off cost increases and undefined “negative effects” hampering performance.

In an interview with Reuters, Lee boasted Samsung was "hungry to grow the business."

That’s a nice sentiment, but growth should not be hard as Samsung is the world’s leading memory-maker at a time when demand for the stuff is surging thanks to enthusiasm for AI. But Samsung faces intense pressure to deliver high-bandwidth memory (HBM) chips to fuel AI. Yet late last month, fellow Korean chipmaker SK hynix became the first manufacturer to mass produce 36GB 12-layer HBM3E chips.

The poor results came a day after Samsung chairman Jay Y Lee denied rumors that the company would spin off its foundry business or chip design operation, amid reports of widespread layoffs, and as industrial has troubled its operations in India and South Korea. ®