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 .

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.