Samsung Electronics issued a surprising apology for delays in shipping new memory chips to support AI applications and preliminary Q3 results below market expectations.

Head of the memory business Jun Young-hyun stated “these are testing times” for Samsung as it faces rising competition from local rival SK Hynix and chipmakers in China, and cautioned of adjustments in inventory by some customers.

Jun was named president of the Device Solution Business in May and noted in a statement to investors and customers the company’s disappointing performance “caused concerns about our fundamental technological competitiveness and the future of the company”.

Many people are talking about Samsung’s crisis.”

He vowed to reorganise the division, with a focus on culture and processes.

Last month, Reuters reported Samsung plans to cut its workforce outside of South Korea continue

The smartphone giant forecast Q3 operating profit to jump nearly fourfold year-on-year to KRW9.1 trillion ($6.7 billion) and revenue 17.2 per cent to KRW79 trillion. It will release net profit and sales by division on 31 October.

In March, Samsung reportedly opted to shift to a new type of advanced machinery to increase the yield of its high bandwidth memory (HBM) chips.

Volume production using a mass reflow moulded underfill technique first used by SK Hynix will not begin until 2025 at the earliest.

In Q2, Samsung’s net profit increased more than fivefold to KRW9.8 trillion and revenue 23.5 per cent to KRW74.1 trillion, led by its chip business, which grew 94 per cent to KRW28.6 trillion.