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Samsung Electronics' operating profit declines by 34% owing to uneven chip demand | Mint

Jan 31, 2024 - livemint.com
Samsung Electronics, South Korea's most valuable company, reported a 34% drop in fourth-quarter profit to 2.82 trillion won ($2.1 billion) from the previous year. The company's shares fell by 1.2% in early morning trading in Seoul. Samsung's net income fell by 74% in the last quarter of the year to 6.02 trillion won ($4.5 billion) due to weak demand for gadgets using its chips, leading to a record loss of 14.9 trillion won in 2023 from a profit of 23.8 trillion won in 2022.

Analysts attribute the weak share price to Samsung's lagging high-bandwidth memory (HBM) chips segment and foundry business, compared to rivals SK Hynix and TSMC. However, the company is optimistic about the recovery of the memory business in 2024, despite potential obstacles. Samsung is also banking on its new Galaxy S24 series to boost smartphone sales.

Key takeaways:

  • Samsung Electronics reported a fourth-quarter profit of 2.82 trillion won ($2.1 billion), a 34% decrease from the previous year's operating profit.
  • The company's net income fell 74% in the last three months of the year to 6.02 trillion won ($4.5 billion) due to weak demand for gadgets using its chips.
  • Samsung is trying to compete with rivals like SK Hynix in the high-bandwidth memory, or HBM chips segment, which are used in training artificial intelligence.
  • Analysts suggest that Samsung's share price is weak due to its HBM lagging behind SK Hynix and its foundry business significantly trailing TSMC.
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