Samsung's profit falls for sixth consecutive quarter: What's affecting performance?
Samsung has posted a 35% drop in operating profit in Q4 FY24 at 2.8 trillion won (Rs. 17,678 crore), versus the 3.7 trillion won average of analysts' estimates. This marks the sixth consecutive quarter of losses for South Korea's leading company. In Q4, the tech giant's revenue hit 67 trillion won, falling short of the projected 70.31 trillion won. In all of 2023, Samsung reported its slimmest operating profit in 15 years.
Slow rebound in smartphone and memory chip markets
The slow demand for smartphones and memory chips—essential components in modern electronics—persists amid economic uncertainty. Tom Kang, Research Director at Counterpoint Technology Market Research, said, "I think this shows that the rebound is slower than we all thought." "Prices are not rising that fast and the demand from certain sectors is not that strong." In December, Micron Technology's better-than-expected revenue outlook hinted that data center construction could offset the tepid computing and mobile device markets.
Samsung's plans for high-density memory chips and AI development
Samsung plans to compete with rival SK Hynix in the high-density memory chip market by increasing capacity by 2.5 times in 2024. High Bandwidth Memory (HBM) chips work with hardware like NVIDIA's accelerators to speed up data processing for tasks such as training AI models. Samsung predicted in October that the $160 billion memory market would gradually recover in 2024, driven by a surge in AI development.
S24 range and foldables to drive growth in 2024
To boost growth in 2024, Samsung is relying on a new lineup of devices and foldables. The company will launch its new S24 range of smartphones on January 17, with a big focus on AI. In the year ahead, it will also release new foldable devices, wearables, tablets, and other consumer goods. Samsung will release a full earnings report, including divisional breakdowns, on January 31.
