Why Samsung still disappoints
For the sixth time in a row, Samsung sees a quarter close with a drop in operating profit: blamed on the weakness of the electronics market. All the details
In the fourth quarter of 2023, Samsung again reported – for the sixth time in a row – a decline in operating profit, which fell by 35 percent to 2,800 billion won (2.1 billion dollars), 24 percent less than estimated . Revenue also fell more than expected, to 67 trillion won. Taking 2023 as a whole, last year Samsung – South Korea's largest company – reported its lowest operating profit in fifteen years.
THE WEAKNESS OF SAMSUNG AND THE WEAKNESS OF THE ELECTRONICS MARKET
The weakness in Samsung's results appears to reflect overall weakness in demand for smartphones and the memory chips that power electronic devices. Several investors are hoping for a market recovery in 2024; recovery which, however, could be slow because – as he told Bloomberg Tom Kang, analyst at Counterpoint – “prices are not rising as fast and demand from certain sectors is not as strong.”
In October, Samsung itself said that the memory chip market, which has been rather sluggish for some time now, would gradually recover in 2024, driven by excitement over artificial intelligence systems. According to the company, component prices were expected to start rising towards the end of 2023. Instead, the disappointing results in the last quarter of last year were also due to the poor performance of the chipmaking division.
Samsung shares lost as much as 0.9 percent on the Seoul stock exchange on Tuesday.
In addition to foundry activities (i.e. microchip manufacturing), not even Samsung's unit dedicated to consumer electronics particularly shone in the fourth quarter of 2023: the fault – according to analyzes reported by Bloomberg – of competition and marketing costs higher.
A POSITIVE SIGN
However, there are some signs of recovery. In November, the South Korean semiconductor industry reported its best gains in years in both production and shipments. It is therefore possible that Samsung's chipmaking activities could return to profitability in the first half of 2024.
ADVANCED MICROCHIPS FOR ARTIFICIAL INTELLIGENCE
As for long-term investment plans, particularly in advanced semiconductors for artificial intelligence, Samsung intends to narrow the gap with South Korean company SK Hynix on high-density memory chips, the capacity of which it wants to more than double productive in 2024.
HBM type chips – from High Bandwidth Memory, i.e. large bandwidth memory – are advanced devices capable of processing data at high speeds and are therefore required in more "intensive" applications such as the training of artificial intelligence models .
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/innovazione/samsung-risultati-quarto-trimestre-2023/ on Tue, 09 Jan 2024 09:32:16 +0000.