Samsung Electronics has expressed optimism for a continued recovery in memory chips and tech demand in 2024. Despite a 34% drop in fourth-quarter profit, the company anticipates improvement as mobile and PC makers integrate more advanced chips into devices, driven by the expanding use of artificial intelligence. Samsung expects demand to gradually recover due to the replacement of older servers and foresees the memory market rebounding despite potential challenges like interest rate policies and geopolitical issues.
The focus for its memory business in 2024 will be on cutting-edge chips, including high bandwidth memory (HBM) and server products for generative AI.
In the fourth quarter of 2023, Samsung reported a lower operating profit of 2.8 trillion won ($2.11 billion), compared to 4.3 trillion won a year earlier. The full year saw its chip business swinging to a record loss of 14.9 trillion won, primarily impacted by weak demand for gadgets using chips.
Despite these challenges, the fourth-quarter losses narrowed, indicating a positive trend as Chinese PC and mobile makers began restocking chips, and memory chip prices rebounded.
Samsung's mobile devices business posted a 2.73 trillion won operating profit in the fourth quarter, up from 1.7 trillion won a year earlier. The company plans to grow annual flagship smartphone shipments at a double-digit rate in 2024, emphasizing AI functions to challenge competitors like Apple.
Samsung also aims to solidify its lead in foldable phones, anticipating increased competition from Google, Motorola, Honor, and Oppo.
However, certain business units, including chip contract manufacturing, TV, and home appliances, remain vulnerable to weak consumer demand. Samsung's share price experienced a 1.4% decline in morning trade after earnings results from its customers Microsoft, Alphabet, and AMD missed expectations.
Despite challenges, Samsung is strategically positioned to navigate market dynamics and capitalize on emerging trends in the technology sector.