Samsung’s Q4 Results: A Tale of Two Fortunes

Samsung Electronics Reports Mixed Q4 Results Amid Chip Segment Challenges

Samsung Electronics, a leading manufacturer of memory chips and smartphones, has reported its fourth-quarter results, which showed a mixed bag of performances. While revenue rose 12% year-over-year, operating profit dropped sharply by nearly 30% quarter-over-quarter due to increased research and development expenses in its chip segment.

Revenue Beats Expectations, Operating Profit Falls Short

The company’s revenue reached KRW 75 trillion, surpassing its own guidance and beating analyst expectations. However, operating profit came in line with Samsung’s forecast, but fell short of expectations due to higher R&D expenses. Samsung shares fell 2.2% in South Korea on Friday morning.

Annual Performance: A Mixed Bag

For the full year, Samsung reported KRW 300.9 trillion in revenue and KRW 32.7 trillion in operating profit. While annual revenue reached the second-highest on record, operating profit was lower than expected. In comparison, the company posted an annual revenue of KRW 258.94 trillion and an operating profit of KRW 6.57 trillion in 2023.

Outlook for 2025: Focus on AI and Premium Devices

Samsung expects earnings to be limited in the current quarter due to weakness in its semiconductor business. However, the company plans to pursue growth through AI smartphones and other premium devices. For 2025, Samsung aims to enhance its technological and product advantages in AI, meet future demand for high-value-added products, and drive sales growth in premium segments.

Chip Business Faces Challenges

Samsung’s chip business posted an operating profit of KRW 2.9 trillion in the fourth quarter, down over 25% from the previous quarter. Despite achieving a record-high fourth-quarter revenue of 30.1 trillion, the company’s memory business faced challenges due to increased R&D expenses and initial ramp-up costs for cutting-edge nodes.

Competition from SK Hynix

Samsung faces stiff competition from SK Hynix in the memory chip market, particularly in high bandwidth memory (HBM) products. While Samsung is cutting down legacy products to better align with market demand, SK Hynix has left Samsung behind in HBM products.

Memory Market Outlook

Samsung expects the overall memory market demand to recover from the second quarter of 2025. However, the company warned that its earnings are expected to remain weak in the current quarter.

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