Samsung Electronics reported a decline in operating profit from the previous quarter, citing increased R&D spending and a slowdown in its semiconductor business. Despite these challenges, the company posted stronger-than-expected revenue for the fourth quarter, though operating profit missed forecasts.
Revenue for the quarter reached 75.8 trillion Korean won ($52.2 billion), slightly surpassing estimates, while operating profit came in at 6.5 trillion Korean won, below expectations. Compared to the previous year, revenue grew by 12% and operating profit surged by 130%, though both metrics fell quarter-over-quarter due to soft market conditions and rising expenditures.
Samsung remains a dominant player in memory chips and smartphones, though its semiconductor business has faced headwinds. The company acknowledged that its Q1 earnings may be limited by weakness in chip demand but plans to drive future growth through AI smartphones and premium devices. For 2025, Samsung aims to strengthen its position in AI and high-value semiconductor products while focusing on premium sales growth.
Shares of Samsung fell 2.2% following the earnings report, while rival SK Hynix saw an 11% drop. The company’s chip business reported 2.9 trillion Korean won in Q4 operating profit, down more than 25% from the previous quarter. However, its memory division achieved record-high Q4 revenue of 30.1 trillion Korean won, driven by demand for AI-related memory products. Despite this, increased R&D expenses and production ramp-up costs for cutting-edge nodes weighed on profits.
Samsung’s position in the high-bandwidth memory (HBM) market lags behind competitors like SK Hynix and Micron. HBM, a type of DRAM used in high-performance computing, has seen surging demand due to AI advancements. To regain market share, Samsung is cutting back on legacy products and shifting focus to high-value semiconductor offerings, expecting memory market demand to recover from the second quarter of 2025.
Samsung’s mobile division, responsible for smartphones, tablets, and wearables, reported lower sales and profits quarter-over-quarter due to the fading impact of flagship model launches. The segment posted 25.8 trillion Korean won in revenue and 2.1 trillion Korean won in operating profit. However, full-year results showed strong flagship sales, including double-digit growth in the Galaxy S24 series, supported by the introduction of Galaxy AI features.
Looking ahead, Samsung is banking on its newly launched Galaxy S25 series to drive sales, reinforcing its focus on premium smartphones and AI technology. As the company continues investing in AI-driven innovation, it aims to challenge Apple’s dominance in the high-end smartphone market.
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