Samsung Electronics flagged a continued restoration in reminiscence chips and tech demand in 2024, after reporting a 34 % drop in fourth-quarter revenue regardless of a reminiscence worth rebound as shopper demand remained weak in many companies.
The world’s greatest maker of reminiscence chips stated it anticipated cellular and PC makers to position extra, higher chips in gadgets as use of artificial intelligence expands, whereas the necessity to change older servers would additionally help a gradual demand restoration.
“In 2024, the memory business expects the market to continue to recover despite various potential obstacles, including interest rate policies and geopolitical issues,” Samsung stated in an announcement.
Samsung stated working revenue fell to KRW 2.8 trillion ($2.11 billion or roughly Rs. 17,522 crore) in October-December, versus KRW 4.3 trillion (roughly Rs. 26,790 crore) a yr earlier.
For the total yr, its chip enterprise swung to a document lack of KRW 14.9 trillion in 2023 (roughly Rs. 92,845 crore) from a KRW 23.8 trillion (roughly Rs. 1,48,273 crore) revenue a yr earlier, hit by an unprecedented downturn attributable to weak demand for devices that use chips.
However, fourth-quarter losses shrank to 2.18 trillion gained in the fourth quarter, decrease than each different quarterly loss in 2023 in the enterprise that has traditionally been Samsung’s money cow as Chinese PC and cellular makers started to restock chips and reminiscence chip costs rebounded.
Cross-town rival SK Hynix additionally stated final week chip costs would enhance this yr as shoppers would want to restock and producers would proceed to chop legacy chip manufacturing.
Samsung stated its reminiscence enterprise would give attention to cutting-edge chips together with excessive bandwidth reminiscence (HBM) and server merchandise used for generative AI this yr.
Looking to meet up with SK Hynix in reminiscence chips used for generative AI, Samsung held its 2023 capital spending regular on the earlier yr partly to broaden manufacturing capability of these chips, whereas SK Hynix and Micron lower funding.
SK Hynix was first to develop the most recent model known as HBM3 and has AI-chip chief Nvidia as a shopper, however Samsung is working to deliver yields up for its HBM3 and future HBM3E merchandise, analysts stated.
“Given it said it is set to produce those advanced chips in the first half of this year, the market will be watching for how much of a meaningful presence Samsung can secure this year,” stated Ko Yeongmin, analyst at Daol Investment & Securities.
Mobile rebound
The cellular gadgets enterprise booked a 2.73 trillion gained working revenue in the fourth quarter, up from 1.7 trillion gained a yr earlier on stronger demand for pricier smartphones, extra pill shipments with new product releases and demand for wearable gadgets throughout the peak vacation season.
In 2023, Apple ended Samsung’ 12-year run because the world’s high vendor of smartphones, snaring a 20 % market share as demand for premium telephones outpaced these of extra inexpensive fashions, in keeping with a report from International Data Corp.
However, Samsung plans to develop annual flagship smartphone shipments at a double-digit charge this yr, helped by its newest premium smartphones with AI capabilities in a push to problem Apple.
It additionally plans to solidify its lead in foldable telephones, as rivals like Alphabet’s Google, Motorola and China’s Honor and Oppo improve their foldable choices.
Among the companies that remained susceptible to weak shopper demand had been Samsung’s chip contract manufacturing, TV and residential equipment models.
Samsung’s share worth fell 1.4 % in morning commerce versus a 0.3 % drop in the benchmark index after earnings outcomes from its prospects Microsoft, Alphabet and AMD missed expectations, analysts stated.
Its shares rose 42 % in 2023 on expectations of improved reminiscence chip demand however have fallen about 5 % year-to-date.
© Thomson Reuters 2024
