(Bloomberg) -- Samsung Electronics Co. posted profit and revenue that fell short of market expectations, stoking uncertainty about the outlook of its pivotal chip division.

The world’s biggest maker of memory chips and smartphones reported preliminary operating profit of around 9.1 trillion won ($6.8 billion) in the September quarter versus the 11.5 trillion won projected. Revenue came to 79 trillion won, compared with expectations for 81.57 trillion won. Samsung plans to provide a full financial statement with net income and divisional breakdowns later this month. 

Samsung shares have slid more than 20% this year as the company struggles in key markets. It’s fallen behind rival SK Hynix Inc. in memory chips used with Nvidia Corp. processors for artificial intelligence development and has shown little progress against Taiwan Semiconductor Manufacturing Co. in outsourced production of custom-made chips. 

Analysts have slashed their price targets on Samsung to factor in the chip division’s struggles in recent weeks. Macquarie in a Sept. 25 report cut Samsung from outperform to neutral and lowered its target price to 64,000 won from 125,000 won. 

Micron Technology Inc., the largest US maker of memory chips, reported last month that demand for AI gear will help boost revenue more than projected.

But Samsung is in the unusual position of playing catch-up to SK Hynix, which took the lead in producing the high-bandwidth memory chips paired with Nvidia’s AI accelerators. Korea’s largest company, in contrast, has faced delays in getting approval for its most advanced HBM. Samsung abruptly replaced the head of its chip business this year, and newly appointed chief Jun Young-hyun warned the company had to change its workplace culture or get caught in a “vicious cycle.” 

The Suwon, South Korea-based company has underperformed other AI stocks and the benchmark Kospi index. 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 last week. Samsung has reduced the size of its workforce in the past as it’s navigated a notoriously cyclical memory chip market.

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