Samsung Projects Business Recovery Fueled by Chip Sector, Despite Profit Downturn
Samsung Electronics reported a notable setback, with a 34% yearly drop in operating profit last quarter, mainly due to sluggish demand for TVs and other consumer electronics.
This downturn offset the hard-won gains from a slowly recovering computer chip market, presenting a formidable challenge for the South Korean tech giant.
Despite these obstacles, Samsung remains optimistic about its future prospects, anticipating a gradual improvement in business performance throughout 2024.
The company foresees a surge in demand for semiconductors, particularly those powering artificial intelligence features increasingly integrated into smartphones, personal computers, and various other products.
However, it acknowledges that macroeconomic uncertainties could persist and continue to impact its operations in the near term.
For the three months through December, Samsung reported an operating profit of 2.8 trillion won ($2.1 billion), a significant drop from the 4.3 trillion won ($3.2 billion) recorded during the same period the previous year. This decline underscores the challenges faced by the company in balancing its financial performance amidst evolving market dynamics.
Samsung’s 2024 Production Plans
In 2023, Samsung’s operating profit for the full year plummeted to 6.5 trillion won ($4.8 billion), marking an 85% decline from 2022 and representing the company’s lowest performance since the global financial crisis of 2008.
Despite these setbacks, the semiconductor division showcased signs of recovery, with losses narrowing during the fourth quarter and the DRAM business returning to profit.
Looking ahead, Samsung aims to capitalize on the growing demand for advanced high-bandwidth memory chips, announcing plans to more than double its production capacity in 2024 to meet the needs of the AI-driven market.
Additionally, the company is focusing on enhancing sales of its latest smartphone, the Galaxy S24, which boasts innovative AI-enabled features such as live translation during phone calls in multiple languages and dialects.
Through these strategic initiatives, Samsung aims to navigate through the challenges and position itself for sustained growth in the dynamic tech landscape.
