Despite a 34% year-on-year drop in fourth-quarter profit, Samsung Electronics is optimistic about a resurgence in memory chips and technology demand throughout 2024. The decline in profit was attributed to weakened consumer demand in various sectors, even as memory prices experienced a rebound.
As the world’s largest producer of memory chips, Samsung foresees a positive trend in mobile and PC manufacturers incorporating more advanced chips into their devices. The expansion of artificial intelligence applications is expected to drive this demand, along with the necessity to replace aging servers, contributing to a gradual recovery in the tech market.
“In 2024, the memory business expects the market to continue to recover despite various potential obstacles, including interest rate policies and geopolitical issues,” stated Samsung in an official release.
The company reported an operating profit of 2.8 trillion won ($2.11 billion) in the October-December period, down from 4.3 trillion won in the same quarter of the previous year. This aligns with Samsung’s earlier estimate, which had flagged a fourth-quarter profit of 2.8 trillion won.
In 2023, Samsung’s chip business experienced a notable shift, swinging from a profit of 23.8 trillion won to a record loss of 14.9 trillion won for the full year. This drastic change was primarily driven by an unprecedented downturn in the memory chip sector, resulting in billions of dollars in operating losses for Samsung’s traditionally lucrative chip business.
Despite the challenging year, the fourth-quarter of 2023 showed signs of improvement, with the memory chip business narrowing its losses to 2.18 trillion won, compared to a 3.75 trillion won loss in the previous quarter. This positive trajectory was fueled by the rebounding prices of memory chips, prompting Chinese PC and mobile manufacturers to restock after depleting their inventories.
The overall fourth-quarter revenue for Samsung fell by 4% to 67.8 trillion won. The company remains cautiously optimistic about the upcoming year, anticipating a broader recovery in tech device demand driven by technological advancements and increased AI integration.