South Korea's Samsung Electronics said on Wednesday it expected fourth-quarter profits to be sharply down compared with the previous quarter, falling short of expectations as the company struggled to meet robust demand for chips used in artificial intelligence servers.

Samsung Electronics' preliminary fourth-quarter operating profit missed estimates by a large margin, with the South Korean tech giant hit hard by extra costs as it works towards providing high-end chips to Nvidia .

In late 2024, it was reported that as a result of these record-breaking sales workers in Samsung’s memory business unit would receive a performance bonus equivalent to 200 percent of their base salary, the highest Target Achievement Incentive (TAI) figure ever posted by the company’s Device Solutions (DS) division.

Samsung Electronics released on Wednesday a fourth-quarter operating profit estimate that missed analyst estimates by a large margin, as it lagged behind rival SK Hynix in supplying high-end chips to Nvidia.

Samsung said in its third-quarter earnings report that it was making progress in its efforts to supply high-bandwidth memory chips to Nvidia, but it has not provided any updates since the. The ongoing delay appears to have put a big dent in its earnings, analysts told Reuters.

The South Korean tech giant expects sales to be between 74T and 76T won (midpoint at 75T won) for the three months ended Dec. 31, 2024. This would demonstrate a 10.65% increase year-over-year, as the company had sales of 67.78T won in the fourth quarter of 2023.

Samsung's earnings were dented by rising research and development costs and the ramp-up of manufacturing capacity for advanced chips

SEOUL -- Samsung Electronics' operating profit fell by 29.2% to 6.5 trillion won ($4.5 billion) in the fourth quarter from the previous three months, falling well short of expectations as the downturn in the memory chip industry deepens.

Samsung Electronics estimated on Wednesday a 131% jump in fourth-quarter operating profit from a year earlier but missed analyst estimates by a large margin as it lagged behind rival SK Hynix in supplying high-end chips to Nvidia.