(Bloomberg) -- Samsung Electronics Co.’s quarterly profit missed estimates, reflecting a costly effort to claw back market share in the pivotal AI chip and smartphone arenas.

Korea’s largest company reported preliminary operating profit of 6.5 trillion won ($4.5 billion) in the December quarter, versus analysts’ average projection for 8.96 trillion won. Revenue came to 75 trillion won, also missing estimates. Samsung will provide a full financial statement with net income and divisional breakdowns later this month.

The disappointing results will likely stoke concerns that the electronics conglomerate is falling further behind rivals SK Hynix Inc. and Micron Technology Inc. in the lucrative AI arena. Samsung has struggled to get its latest products certified by Nvidia Corp., allowing SK Hynix in particular to carve out a larger slice of the market for the high-bandwidth memory that AI accelerators depend on.

Investors remain cautious about Samsung’s ability to catch up in the high-end memory market. Samsung’s chip division is struggling to regain its pandemic-era heights and risks slipping further behind SK Hynix, which in October posted record profit. Keeping up requires high research and development and capacity expansion costs, which are weighing on profitability.

Billions of dollars are at stake, however. Just last week, Microsoft Corp. said it plans to spend $80 billion building out data centers this fiscal year alone, triggering a broad rally in SK Hynix and other AI beneficiaries.

Samsung also remains exposed to weak mobile chip sales and is grappling with a rising supply of legacy chips in China. Demand for its smartphone chips is expected to stay weak in 2025, executives said in October. In the TV and home appliances arenas, steep price competition from Chinese manufacturers is also eating margins.

Last year, Samsung chip division chief Jun Young-hyun apologized for disappointing results and acknowledged delays in winning Nvidia certification.

Samsung must now review its organizational culture and processes, Jun had said — echoing previous comments about the need for fundamental change at one of Korea’s oldest companies. It’s begun laying off workers in Southeast Asia, Australia and New Zealand as part of a plan to reduce global headcount by thousands of jobs, Bloomberg News reported.

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