SEOUL – Samsung Electronics announced progress on a major artificial intelligence-focused chip supply deal on Thursday, aiming to reassure investors after a slowdown in semiconductor profits in the latest quarter.

The South Korean tech giant said its operating profit for the July-September period rose more than 277 percent from a year earlier to 9.18 trillion won ($6.65 billion). ). But that figure represents a 12% decline from the second quarter, which Samsung attributes largely to one-time costs, such as implementing employee incentives at its computer chip business, and the effects of the weakness of the US dollar.

Samsung’s semiconductor division posted an operating profit of 3.86 trillion won ($2.8 billion) in the quarter, rebounding from a deficit in 2023 but down sharply from 6.45 trillion won. won ($4.67 billion) reported for the April-June period.

While Samsung saw strong demand for AI and server chips last quarter, its mobile chip business weakened as some customers adjusted their inventories. The market was also affected by the increased supply of existing memory products by Chinese manufacturers, the company said in a statement.

More importantly, Samsung lags behind major competitors such as SK Hynix in HBM3E, the latest generation of high-bandwidth memory chips used to power AI applications.

In a conference call, Samsung Executive Vice President Jaejune Kim said the company recently made “significant progress” in a qualification testing process to supply its HBM3E products to a “major customer” not specified, a development he said could potentially boost sales during the year. fourth trimester. Kim’s comments sparked speculation that Samsung is moving closer to a supply deal with Nvidia, a major U.S. manufacturer that designs advanced chips powering AI.

“In the fourth quarter, although memory demand for mobile and PC may see a slowdown, AI growth will keep demand at robust levels. Against this backdrop, the company will focus on growing sales of high-bandwidth memory and high-density products,” Samsung said.