What just happened? Samsung has just posted its latest financial results, and it's not good news. The South Korean tech giant experienced its fourth consecutive quarterly profit decline during the holiday season, while operating profit for the full year was down 85% compared to 2022, marking Samsung's worst year since the financial crisis of 2008.
Samsung reported 258.94 trillion won ($194 billion) in annual revenue and 6.57 trillion won ($4.9 billion) in operating profit for the fiscal year of 2023. That latter figure was almost seven times lower than the $32.5 billion Samsung generated in 2022.
The company said net income fell 74% in the last three months of the year to 6.02 trillion won ($4.5 billion), after its chip operations posted a loss of 2.18 trillion won, which was larger than analysts' expectations.
Samsung wrote that while macroeconomic uncertainties are expected to continue into 2024, the memory market and demand for IT are expected to continue recovery.
Despite being the fourth quarter in a row that it experienced a profit decline, Samsung's Q4 revenue and operating profit increased from the third quarter, something the company attributes to improved performance in the memory segment due to higher prices, along with continued strength in sales of premium display products.
Looking at the first quarter of 2024, Samsung plans to improve its profits by increasing sales of high-value-added products. It cites its component business meeting demand for advanced products and those aimed at generative AI as an example. It also writes that the Device eXperience (DX) Division will strengthen AI features in smartphones and other consumer products; the recently revealed Samsung S24 series has a heavy AI focus.
Samsung said last year that it plans to double its production capacity of advanced high-bandwidth memory chips in 2024 to meet AI demand. "In 2024, the memory business expects the market to continue to recover despite various potential obstacles, including interest rate policies and geopolitical issues," the company said in a statement.
Samsung expects earnings in the first half of 2024 to show a moderate improvement, with a more significant increase in the second half of the year.
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