Latest news with #tech giant
Tahawul Tech
01-08-2025
- Business
- Tahawul Tech
Samsung struggles to keep up in the AI chip race
Samsung Electronics is struggling to stand out in the global AI chip leading to deepening market share losses caused due to failures to capitalize early on the AI boom, experts say. Samsung's second-quarter operating profit plummeted 55% to 4.7 trillion won ($3.4 billion), down from 10.4 trillion won ($7.5 billion) a year earlier, though its revenue increased slightly compared to the same period last year. Operating profit for its chip division, historically a cash cow that used to account for two-thirds of its total profit, shrank by nearly 94% from April to June compared to a year ago. On Tuesday, Samsung's Korean shares slid nearly 2% on the news before paring some losses. It blamed the worse-than-expected performance on inventory value adjustments, low utilization rate for its contract chipmaking business and continued fallout from US export controls on advanced AI chips to China – a key market for Samsung. Thursday's disappointing earnings report reignites concerns about the future of the embattled South Korean tech giant. Samsung warned investors of its dismal performance in its earnings projection earlier this month. The results come on the heels of a $16.5 billion deal with Tesla, announced this week, to produce its new chips – a move expected to boost Samsung's outlook. Looking ahead for the second half the year, Samsung said it plans to proactively meet the growing demand for high value-added and AI-driven products and continue to strengthen competitiveness in advanced semiconductors. How Samsung lost its edge South Korea's largest conglomerate has run into significant headwinds in recent years across both of its key revenue streams: the manufacturing of memory chips, which help devices store data, and logic chips, which power data processing and computation. Once the industry's leading memory chipmaker, Samsung has lost ground to rivals like South Korean SK Hynix and American Micron Technology, particularly in the fast-growing market for high bandwidth memory (HBM) sector. HBM, made up of stacks of DRAM memory chips (dynamic random access memory) used for short-term data storage, are essential for AI processors developed by companies like Nvidia and AMD. Meanwhile, Samsung's logic semiconductor business trails industry leader TSMC both in cutting-edge chip technologies and market share. In the first quarter of this year, SK Hynix overtook Samsung to lead the global DRAM market, while TSMC extended its dominance in logic chips with a 68% market share, compared to just 8% for Samsung, according to market research firm TrendForce. Sanjeev Rana, head of Korea research at CLSA, a brokerage firm, said a series of 'missteps' by Samsung – most notably management's failure to anticipate the surge in AI demand – has contributed to its current struggles. 'They were slow to recognise the coming AI revolution, and they bet on some other products, other technologies, which, in hindsight, didn't turn out to be very good bets', he said, explaining that Samsung overlooked the potential of HBM initially. As a result, Samsung has so far missed out on being a supplier for its most advanced high-bandwidth memory product to Nvidia, which accounts for nearly 80% of global HBM demand last year, according to Rana. The product has repeatedly failed Nvidia's performance tests, though he expects the company to clear them in the next two months. While Samsung announced in June that it managed to secure orders from AMD and Broadcom, rivals SK Hynix and Micron had already begun delivering samples of more advanced memory chips to customers. At the same time, Samsung's logic chip business – once central to its ambition to rival TSMC – is also under mounting pressure. Despite tens of billions of investments over the past few years, the company has been unable to secure meaningful orders for its advanced chips, leading to underutilised facilities, Rana said. Last year, CLSA estimated that Samsung's contract chipmaking business posted an operating loss of 5.6 trillion won ($4.1 billion). That figure is expected to rise to 6.6 trillion won ($4.8 billion) this year. US restrictions on the sale of advanced chips to China have also taken a toll on Samsung's revenue, as shipments to Chinese clients and projects were forced to pause pending regulatory review, said Joanne Chiao, an analyst at TrendForce. But with some chips now having cleared the review process, the second quarter is expected to be the most affected period, she added. A potential turnaround thanks to Tesla Tesla offered Samsung a lifeline this week. Its CEO Elon Musk announced that the electric vehicle company has tapped the Korean chipmaker to make its new chips for self-driving cars and humanoid robots in a $16.5 billion deal. 'Samsung's giant new Texas fab will be dedicated to making Tesla's next-generation AI6 chip,' he said in a post on X. 'Samsung agreed to allow Tesla to assist in maximizing manufacturing efficiency. This is a critical point, as I will walk the line personally to accelerate the pace of progress.' Samsung's shares surged more than 6.9% to reach their highest level since September following news of the deal. Tesla currently sources its AI4 chips, which power its advanced driver assistance systems called Full Self-Driving (FSD) software, from Samsung, but it enlisted TSMC to produce its AI5 chips, according to Musk. The deal came after Samsung postponed the operational start of its chipmaking plants in Taylor, Texas to 2026 from its original schedule of 2024, as it struggled to win customers for the project. Ray Wang, research director focusing on semiconduFctor industry at Futurum Group, called the deal with Tesla 'significant,' saying it could boost Samsung's struggling profitability and validate its capabilities in producing advanced chips. The agreement will also help increase utilization of its Texas facilities, improving the company's return on investment, he added. Rana said that although mass production for the Tesla project won't begin until 2027, the deal is a boost to market sentiment and represents 'a big word of confidence. The management has done a lot of restructuring for this business in the last 12-15 months or so, so I think they now understand what the problems were, and they have made some efforts to resolving those issues,' he said. 'Things will get better from the second half (of the year).' Source: CNN Image Credit: Stock Image
Bloomberg
31-07-2025
- Business
- Bloomberg
Amazon Projects Profit That Underwhelms on Expense of AI Race
Inc. projected operating income in the current quarter that fell short of analysts' estimates, worrying investors that the tech giant is spending too much to keep up with competitors in the race for artificial intelligence. Operating profit will be $15.5 billion to $20.5 billion in the period ending in September, compared with an average estimate of $19.4 billion. Sales will be $174 billion to $179.5 billion, the company said Thursday in a statement. Analysts, on average, expected $173.2 billion.
Telegraph
28-07-2025
- Business
- Telegraph
Google triggers turmoil for web businesses with AI overhaul
Google is overhauling its dominant search engine with an 'AI mode' that will no longer provide links to other websites, in a major shift expected to cause turmoil across the web. The tech giant will launch the feature in the UK from Tuesday. Instead of showing links to websites, the AI mode generates its own answers using information from around the web. The update, seen as a landmark moment for the web, is likely to lead to more turbulence for websites that have already seen huge drops in traffic from Google as the company pushes AI-driven answers into its search results. Google dominates the search market, accounting for more than 90pc of British queries, meaning much of the web relies on traffic from its results. The new AI mode, which will be made available over the coming days, acts in a similar way to chatbots such as ChatGPT, providing answers without users needing to click on other websites. The feature marks a wholesale departure from the company's foundations, which saw it crawl the web to offer users '10 blue links'. Although Google will still offer its traditional search results, it will feature AI mode as an option in results, and the company has described the feature as 'the future of Google search', suggesting it will increasingly prioritise it in future. AI mode will be able to recommend restaurants, help buy clothes and find information, tasks that entire web industries have been built around. Google's Hema Budaraju said that the change was 'the beginning of a major shift' and would let users 'find information that was previously much harder to find'. However, it is likely to be seen as a new setback to web publishers that are already reeling from existing changes to Google's search engine. Over the past year, Google has started furnishing results with 'AI overviews', which seek to answer queries directly and are positioned ahead of links to other websites. The Pew Research Centre said last week that searches featuring this AI overview feature only result in people clicking a link 8pc of the time, compared to 15pc for search results that do not include the feature. While the company has said its AI-generated answers continue to provide links to other sites, Pew found that people will only click them 1pc of the time. According to analytics company Similarweb, more than two thirds (69pc) of news searches do not lead to users clicking on a link. The development is likely to provoke a backlash from the websites whose data Google relies on to train its AI systems, and calls for the company to pay for the material its systems use. 'This is yet another example of Google using its dominant position in search to force news publishers to allow their content to be ingested for AI,' said Owen Meredith, the chief executive of the News Media Association, an industry body of which The Telegraph is a member. 'If publishers want to block Google's search crawlers to stop their content from being exploited with no transparency, consent - or appropriate reward for original source material - they'll be demoted from general search listings, causing catastrophic drops in audiences. 'It's a lose-lose for sources of trusted verified news and information as the dominant tech firms continue to draw yet more web traffic into their walled gardens.' Publishers and artists are demanding that the Government introduce stricter rules on copyright protection to prevent AI businesses scraping their data without consent. A group of independent publishers submitted a formal complaint to British and European competition authorities earlier this month, saying Google should be forced to let websites opt out of training its AI overviews. Last week, the Competition and Markets Authority said Google has 'strategic market status' in search, a designation that could lead to publishers receiving fairer terms from the company. While many chatbot companies have reached agreements with publishers to use their content, Google has largely avoided striking such deals.
BBC News
28-07-2025
- Business
- BBC News
Google launches new AI search feature in UK
Google is rolling out a new tool in the UK that will generate results using artificial intelligence (AI), in a significant shake-up to the world's most popular search of a list of search results showing links to other websites in blue type, people who choose "AI Mode" will be given an answer written in a conversational style, containing far fewer links to other new search tool will not replace Google's existing search platform, which processes billions of queries every experts predict such tools will increasingly incorporate AI, a shift that is concerning organisations, firms and publishers, which rely on search traffic. People are increasingly turning to AI chatbots such as ChatGPT instead of traditional search engines to find quick, simple answers to questions, even though they are not always itself already includes a brief AI-generated "overview" in the listed results for some the new tool, which uses Google's Gemini AI platform to generate its answers, has already been launched in the US and is being rolled out in the UK over the next few now, AI Mode will be optional and will appear both as a tab and an option within the search box itself. Complicated queries The tech giant said it was responding to changes in the way people use its search engine to ask more complicated questions."About two years ago, if you spilled coffee on your carpet, you would have [searched for] 'clean carpet stain'," said Google's product manager for search, Hema Budaraju. "That's how you would have probably keyworded your way through. "Now, my query is likely to be, 'I spilled coffee on my Berber carpet, I'm looking for a cleaner that is pet friendly'." The BBC was unable to test the tool with its own questions during the demo because the tool had not yet been activated in the Google provided a demo using the example of someone searching for suitable places to take a young family strawberry the answers it provided seemed to be spread over a wide geographical area. It featured a handful of links to businesses, including their locations on a map, but they came lower down in the response, compared to a traditional Google search. Clicking links Businesses, from retailers to news publishers, currently rely on web traffic funnelled their way from Google's search results. Firms can pay for prime spots on the results lists, as a form of advertising.A shift towards AI-generated responses, containing fewer direct links, could up-end that Budaraju said the firm had not yet finalised how advertising revenue for AI Mode would work, or whether firms would be able to pay to be included in the it is already concerning some businesses, who say people are less likely to click through to their websites via the links contained in an AI summary. Ms Budaraju disagreed with this characterisation."I would say that I think people are going to use these technologies to unlock newer information-seeking journeys," she said. "These kind of questions didn't happen before, and now you made it really possible for people to express anything a lot more naturally."The Daily Mail claims the number of people who click its links from Google search results has fallen by around 50% on both desktop and mobile traffic since Google introduced its AI Overview a recent study by the Pew Research Centre suggested that people only clicked a link once in every 100 searches when there was an AI summary at the top of the page. Google argues the research methodology in that study was flawed. News model Rosa Curling, director of the campaign group Foxglove which commissioned the research, said she was concerned what the increased use of AI might mean for news AI-generated summaries are often inaccurate, people weren't clicking through to the original news items they were based on, she said, undermining the business models of news organisations."What the AI summary now does is makes sure that the readers' eyes stay on the Google web page," she said."And the advertising revenue of those news outlets is being massively impacted."Google said it already generates more than two billion AI Overview boxes every day in more than 40 languages, although not in the EU, where legislation procludes are also significant concerns about the environmental impact of increased AI use. Running AI requires huge data centres that use a lot of power and clean water. Ms Budaraju said Google remained committed to sustainability."We are constantly, as Google and as Search, evolving sustainable ways to serve technology," she said.
Yahoo
24-07-2025
- Business
- Yahoo
Analog Devices Earnings Preview: What to Expect
Wilmington, Massachusetts-based Analog Devices, Inc. (ADI) is an original equipment manufacturer of semiconductor devices, specifically, analog, mixed signal, and digital signal processing integrated circuits. With a market cap of $116.9 billion, Analog Devices' operations span the Americas, Europe, and the Indo-Pacific. The tech giant is expected to report its third-quarter results on Wednesday, Aug. 20. Ahead of the event, analysts expect ADI to report an adjusted EPS of $1.93, up 22.2% from $1.58 reported in the year-ago quarter. Moreover, the company has surpassed the Street's bottom-line estimates in each of the past four quarters. More News from Barchart Dear Microsoft Stock Fans, Mark Your Calendars for July 30 Dear QuantumScape Stock Fans, Mark Your Calendars for July 23 NVDA Broken Wing Butterfly Trade Targets A Profit Zone Between 150 and 160 Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. For the full fiscal 2025, analysts expect Analog's EPS to come in at $7.40, up nearly 16% from $6.38 reported in fiscal 2024. In fiscal 2026, its earnings are expected to surge 18.9% year-over-year to $8.80 per share. ADI stock has dropped nearly 1% over the past 52 weeks, lagging behind the S&P 500 Index's ($SPX) 14.5% surge and the Technology Select Sector SPDR Fund's (XLK) 15.6% returns during the same time frame. Despite delivering impressive results, ADI stock prices dropped 4.6% in the trading session following the release of its Q2 results on May 22. The company's revenues for the quarter soared 22.3% year-over-year to $2.6 billion, coming in at the high end of its guidance. Further, its EPS increased 32% year-over-year to $1.85, surpassing the Street's expectations by 9.5%. However, its Q3 revenues guidance of $2.75 billion (midpoint) fell below several estimates, and the company expects the second half of 2025 to be marked with a slowdown in automotive demand, which raised investor concerns. Nevertheless, analysts remain optimistic about ADI's long-term prospects, and the stock holds a consensus 'Moderate Buy' rating overall. Of the 32 analysts covering the stock, opinions include 21 'Strong Buys,' two 'Moderate Buys,' and nine 'Holds.' Its mean price target of $258.76 suggests a 13.5% upside potential from current price levels. On the date of publication, Aditya Sarawgi did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
