Samsung Electronics, the South Korean technology giant, has reported a 34% decrease in operating profit for the last quarter of 2023. This decline is mainly attributed to the lackluster demand for its TVs and other consumer electronics. Despite this setback, the company remains optimistic about the future, expecting a turnaround in 2024 with a projected increase in demand for semiconductors, which power the AI features found in smartphones, personal computers, and other devices.
The company’s operating profit for the last quarter was reported at 2.8 trillion won, a significant drop from 4.3 trillion won during the same period in the previous year. The full-year operating profit for 2023 was 6.5 trillion won, marking an 85% decline from the previous year and representing the company’s lowest since 2008. The semiconductor division, in particular, faced challenges, posting a loss of 14.9 trillion won for the year. However, the fourth quarter showed some signs of improvement as the DRAM business returned to profit, with the company expecting the market to continue recovering in 2024 despite potential obstacles.
Samsung’s outlook for 2024 is buoyed by its plans to more than double its production capacity of advanced high-bandwidth memory chips to meet the increasing demands fueled by AI. The company acknowledges that macroeconomic uncertainties could continue to impact its business in the short term, but it remains committed to navigating through these challenges and capitalizing on the growing semiconductor market.
The sluggish demand for consumer electronics products has been a roadblock for Samsung, but the gradual recovery of the computer chip market has provided a glimmer of hope. With AI becoming increasingly pervasive across various technological applications, the company is banking on the surge in demand for semiconductors to drive its resurgence in 2024.
While uncertainties loom on the horizon, Samsung’s resilience and strategic initiatives position it for a potential rebound. As the semiconductor market evolves and AI technologies become more integral to daily life, Samsung’s focus on expanding its production capacity and adapting to market dynamics sets the stage for a compelling comeback story in the year ahead.
By
