Despite the challenges in its semiconductor business, Samsung's overall net income for the quarter reached 9.78 trillion won, exceeding analysts' predictions of 9.14 trillion won, thanks to strong performances in other sectors.

This net income figure slightly surpassed the company's preliminary estimate of 9.1 trillion won, but still led to a 0.2% drop in Samsung's shares and a 1.3% decline in the broader South Korean market.

As part of its response to ongoing challenges, Samsung has begun laying off workers and plans to reduce its global workforce by thousands to streamline operations.

Samsung Electronics' chip division reported a staggering decline in operating profit, plummeting over 40% to approximately 3.86 trillion won (US$2.8 billion) in the third quarter of 2024, which fell short of market expectations of 6.7 trillion won.

The company is struggling to compete in the high bandwidth memory (HBM) chip market, particularly for AI applications, which has contributed to its disappointing results.

Delays in obtaining certification from NVIDIA for AI memory chips have allowed competitors like SK Hynix and Micron Technology to gain an edge in high-bandwidth memory sales.

Looking ahead, Samsung anticipates growth driven by demand for advanced chipsets, particularly as tech companies continue to invest heavily in technology and infrastructure.

However, the company warned that semiconductor market demand trends are expected to remain weak into the fourth quarter, indicating a sluggish recovery.

Investor sentiment has taken a hit, with approximately $10.7 billion worth of Samsung shares sold by international investors since late July, reflecting skepticism about a swift turnaround.

Leadership stability is becoming increasingly crucial for Samsung, especially following recent legal troubles faced by executive chairman Jay Y. Lee and ongoing changes in the semiconductor division.

In light of the disappointing results, Jun Young-hyun, head of Samsung's chip division, acknowledged the need for significant organizational changes and a cultural review within the company.

The rapid evolution of the memory chip market, particularly driven by AI technology, has underscored the importance of innovation, with competitors like Nvidia and TSMC significantly increasing their market value while Samsung struggles to maintain its leadership.