Samsung profit from chips and smartphones collapsed by 22–25 % in the last quarter, but soon everything will work out

At first glance, the dynamics of the revenue of Samsung Electronics in the last quarter was quite inspiring: an increase of 12 % in an annual comparison of up to $ 52.2 billion was combined with a slight exceeding the forecast. Operating profit in an annual comparison grew by 130 %to $ 4.5 billion. However, in a consistent comparison, Samsung worsened the revenue (by 4 %) and operating profit (30 %).

Image Source: Samsung Electronics

In addition to poor demand, in such dynamics, the Samsung leadership blames the increased expenses, some of which are aimed at researching and developing promising types of memory, including the rapidly evolving HBM. Formally, the revenue of Samsung in the fourth quarter slightly exceeded the company’s own forecasts, and the operating profit was at the level of expectations. One way or another, the annual revenue of Samsung reached $ 207 billion and turned out to be the second largest value for the entire history of the company after 2022. Operating profit reached $ 22.5 billion.

In the current quarter, Samsung expects moderate financial indicators, partly due to US restrictions on the supply of advanced memory microcircuits to the Chinese market as part of computing accelerators, but this factor in the company is considered temporary. Apparently, this position is due to the readiness of Samsung in March of this year to present the improved HBM3E chips, which can satisfy the technical requirements of NVIDIA for use in the latest accelerators for the Western markets. In the current quarter, Samsung intends to focus on promoting expensive smartphones, including devices with AI support – earlier this month, Galaxy S25 were represented. The contract unit will also not please the management of Samsung with financial indicators, as the company recognized.

Samsung operating profit in the field of memory production and other semiconductor components consistently decreased by 25 % to about $ 2 billion. This dynamics spoils the overall picture, since the implementation of memory microcircuits brought the company in the last quarter a record $ 20.7 billion revenue. The boom of artificial intelligence systems in one way or another helps the revenue of the largest memory manufacturer, even if Samsung is poorly represented in the most actively developing market segments. In any case, Samsung reduces the production of classic memory chips and tries to release more HBM. Restoration in the memory market as a whole this year will begin with the second quarter, as the company believes. In the memory segment, Samsung intends to maintain capital costs at the level of last year, they amounted to $ 37 billion.

In the smartphone segment, the Samsung operating profit in an annual comparison fell by 22 % to $ 1.44 billion, the revenue also decreased and limited to $ 17.7 billion. Nevertheless, at the end of the year Samsung revenue in the smartphone market increased because the Galaxy S24 family provided The growth of relevant indicators by a two -digit number of percent. At the end of the year, tablets and wearable devices showed growth both in monetary and in kind.