Amazon Launches First Test Satellites for Kuiper Internet Network

This handout photo provided by United Launch Alliance on October 6, 2023, shows the United Launch Alliance (ULA) Atlas V rocket and Amazon's Project Kuiper Protoflight mission sitting on the pad at Space Launch Complex 41 (SLC-41) in Cape Canaveral, Florida, on October 5, 2023. (Photo by Handout / United launch Alliance / AFP)
This handout photo provided by United Launch Alliance on October 6, 2023, shows the United Launch Alliance (ULA) Atlas V rocket and Amazon's Project Kuiper Protoflight mission sitting on the pad at Space Launch Complex 41 (SLC-41) in Cape Canaveral, Florida, on October 5, 2023. (Photo by Handout / United launch Alliance / AFP)
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Amazon Launches First Test Satellites for Kuiper Internet Network

This handout photo provided by United Launch Alliance on October 6, 2023, shows the United Launch Alliance (ULA) Atlas V rocket and Amazon's Project Kuiper Protoflight mission sitting on the pad at Space Launch Complex 41 (SLC-41) in Cape Canaveral, Florida, on October 5, 2023. (Photo by Handout / United launch Alliance / AFP)
This handout photo provided by United Launch Alliance on October 6, 2023, shows the United Launch Alliance (ULA) Atlas V rocket and Amazon's Project Kuiper Protoflight mission sitting on the pad at Space Launch Complex 41 (SLC-41) in Cape Canaveral, Florida, on October 5, 2023. (Photo by Handout / United launch Alliance / AFP)

Amazon's first pair of prototype satellites for its planned Kuiper internet network were launched into space on Friday from Florida, the company's first step before it deploys thousands more into orbit to beam internet service globally and compete with SpaceX's Starlink.

A United Launch Alliance Atlas 5 rocket emblazoned with the Amazon logo lifted off from Cape Canaveral shortly after 2 p.m. Eastern time (1800 GMT), carrying the two Kuiper test satellites, a long-awaited mission Amazon initially had intended to launch using different rockets.

The mission aims to test Amazon's first pieces of technology in space as the e-commerce and web services giant looks to deploy 3,236 more satellites in the next few years and offer broadband internet globally, a feat Elon Musk's SpaceX is targeting with its nearly 5,000 Starlink satellites in orbit.

In the days leading up to the launch, Amazon divulged few specifics about the two satellites, which were built at its satellite plant in Redmond, Washington.

The launch live stream hosted by the United Launch Alliance, the Boeing-Lockheed joint venture, ended shortly after the rocket's liftoff without showing the deployment of the satellites. Amazon later said the two satellites were deployed and its mission operations center had made contact with them.

Amazon has vowed to invest $10 billion into its Kuiper project, which was announced in 2019, the year SpaceX began deploying its first operational Starlink spacecraft.

The US Federal Communications Commission is requiring Amazon to deploy half its planned satellite constellation by 2026.

The market for broadband internet service from low-Earth orbiting satellites is viewed as being worth up to tens of billions of dollars in the next decade.

With Starlink making SpaceX the world's largest satellite operator, Amazon's other rivals include Canada's Telesat, which has not yet launched satellites, and French satellite firm Eutelsat's OneWeb, which mainly offers its internet service to governments and businesses.

Like SpaceX, Amazon aims to target individual consumers and enterprise customers with Kuiper, pulling from its devices playbook to build consumer terminals at a company cost of $400 each - though it has not yet announced prices. SpaceX's consumer Starlink terminals are priced at $599 each.

To deploy the rest of the Kuiper network, Amazon last year announced a bulk launch deal for 83 launches - the largest commercial rocket procurement ever - from various rocket companies, including Jeff Bezos' Blue Origin, ULA and Europe's Arianespace.

Amazon and Bezos, its founder, are facing a shareholder lawsuit over that launch deal that accuses the company of failing to do proper due diligence and failing to consider potentially cheaper rockets from its rival SpaceX. SpaceX's reusable Falcon 9 rocket has been central to Starlink's swift deployment.



Samsung Electronics Apologizes for Disappointing Profit as It Struggles in AI Chips

Flags with the logo of Samsung Electronics are seen during a media tour at Samsung Electronics' headquarters in Suwon, South Korea, June 13, 2023. (Reuters)
Flags with the logo of Samsung Electronics are seen during a media tour at Samsung Electronics' headquarters in Suwon, South Korea, June 13, 2023. (Reuters)
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Samsung Electronics Apologizes for Disappointing Profit as It Struggles in AI Chips

Flags with the logo of Samsung Electronics are seen during a media tour at Samsung Electronics' headquarters in Suwon, South Korea, June 13, 2023. (Reuters)
Flags with the logo of Samsung Electronics are seen during a media tour at Samsung Electronics' headquarters in Suwon, South Korea, June 13, 2023. (Reuters)

Samsung Electronics warned its third-quarter profit would come in below market expectations and apologized for the disappointing performance with the tech giant lagging its rivals in supplying high-end chips to Nvidia in the booming AI market.

The rare apology illustrates the challenges facing the company, which has been the world's biggest memory chipmaker for three decades but is battling growing competition in both conventional and advanced chips.

Samsung said its AI chip business with an unidentified major customer was hit by a delay, while Chinese chip rivals increased supplies of conventional chips, contributing to the decline in its semiconductor earnings.

The world's largest memory chip, smartphone and TV maker estimated an operating profit of 9.1 trillion won ($6.78 billion) for the three months ended Sept. 30, versus a 10.3 trillion won LSEG SmartEstimate.

That would compare with 2.43 trillion won in the same period a year earlier and 10.44 trillion won in the preceding quarter.

"The earnings are a shock compared to what many analysts expected initially," said Lee Min-hee, an analyst at BNK Investment & Securities.

"I don’t see its earnings improving in the current quarter," he said, saying it lags SK Hynix in increasing sales of high bandwidth memory (HBM) chips to Nvidia and its high exposure to the Chinese market hurts.

Samsung's late response to the AI chip market increases its reliance on traditional, lower-margin chips, making it more vulnerable to competition from China and slowing demand for smartphones and PCs, analysts say.

High-margin chips used in AI servers are driving a recovery in the chip market after a post-pandemic downturn last year. Still, Samsung has lagged SK Hynix in supplying high-bandwidth memory (HBM) chips to AI leader Nvidia.

"We have caused concerns about our technological competitiveness, with some talking about the crisis facing Samsung," Young Hyun Jun, Vice Chairman, Device Solutions Division, Samsung Electronics, said.

"These are testing times," he said, pledging to turn the challenge into an opportunity and focus on enhancing long-term technological competitiveness.

Samsung's share price, already down more than 20% so far this year, fell 1.3%, underperforming a 0.4% fall in the benchmark KOSPI.

HBM CHIPS DELAYED

Samsung said in a statement the start of sales of its high-end HBM3E chips to a major customer has been "delayed relative to our expectations". It did not elaborate on the issue.

Samsung said in July it would start mass-producing the chips during the July to September period.

Earnings declined in the company's memory chip business as Chinese rivals increased supplies of "legacy" products and some mobile customers adjusted inventories, offsetting solid demand for HBM and other chips used in servers, Samsung added.

Samsung's contract chip manufacturing business, which designs and produces custom-made chips for other companies, likely continued to lose money in the third quarter as it is struggling to compete with leader TSMC, which counts Apple and Nvidia among its customers, analysts said.

Samsung's chief Jay Y. Lee told Reuters on Monday that he is not interested in spinning off the contract chip manufacturing business as well as its logic chip designing operation.

Samsung said one-off costs such as provisions for "incentives" and the unfavorable local currency also contributed to the chip earnings decline.

Earnings in its mobile division improved from the preceding quarter on solid sales of its flagship smartphones, while earnings at its display unit grew as its customers, which include Apple, launched new models.

Samsung will announce detailed earnings results on Oct. 31.

In May, Samsung abruptly replaced the chief of its semiconductor division, handing the reins to Jun in a bid to overcome a "chip crisis".

Samsung is also cutting as much as 30% of overseas staff at some divisions, Reuters reported in September, underscoring the challenges it faces.

Its US rival Micron last month forecast first-quarter earnings ahead of Wall Street estimates and reported its highest quarterly revenue in over a decade on the back of booming demand for its memory chips used in AI.