Samsung Electronics is set to release its preliminary fourth-quarter earnings for 2024 on Jan. 8, with analysts predicting a sharp decline in profits due to ongoing struggles in its core businesses, including DRAM, NAND flash memory, and foundry operations. Weak smartphone shipments have further weighed on the company’s display segment, dampening expectations.
The consensus among analysts estimates Samsung’s Q4 revenue at roughly 76 trillion won ($58 billion) and operating profit at about 7 trillion won ($5.3 billion). This represents a significant drop from initial forecasts in August 2024, which had pegged operating profit at 15 trillion won. Revised projections fell to 12 trillion won, then 10 trillion won, before settling at the current estimate — a 23% decrease from the prior quarter’s 9.18 trillion won.
Mirae Asset Securities recently lowered its estimates, cutting its revenue projection from 74.4 trillion won to 73.6 trillion won and its operating profit forecast from 8.9 trillion won to 7.7 trillion won. Samsung Securities reduced its operating profit projection by 28%, down to 7.26 trillion won, while slightly raising its revenue estimate to 79.62 trillion won. Korea Investment & Securities also forecast revenue at 74 trillion won and operating profit at 7.3 trillion won.
The company’s Device Solutions (DS) division, a cornerstone of its business, continues to struggle, with both memory and non-memory segments posting weak results. Prices for DRAM and NAND flash memory fell further in Q4, exacerbating the division’s losses. By late December 2024, the price of NAND flash memory used in memory cards and USB drives (128Gb 16Gx8 MLC) had dropped 3.48% month-over-month to $2.08, halving from $4.72 at the start of the year. DRAM prices, while no longer in freefall, have stagnated after plunging 25% in 2024, with steep declines in August, September, and November.
“The prolonged demand slump has significantly impacted Samsung’s Q4 performance,” said Lee Jong-wook, an analyst at Samsung Securities, who downgraded DRAM bit growth projections from -5% to -12%.
Mirae Asset Securities analyst Kim Young-geon highlighted further pressure on DRAM prices in Q4, which pushed the average selling price (ASP) down by 3.3 percentage points. “We’ve adjusted our forecasts for the DS division, particularly for DRAM, and factored in potential inventory valuation losses,” Kim said.
Meanwhile, rival SK Hynix has capitalized on demand for high-bandwidth memory (HBM), offsetting losses in generic memory markets with AI-driven growth. Samsung, however, has struggled to establish itself in the HBM market. “Samsung’s exclusion from the AI and HBM upcycle has weighed on its stock price,” said Chae Min-sook, an analyst at Korea Investment & Securities. Chae added that the situation may improve as Samsung inches closer to becoming a supplier for Nvidia’s ecosystem.
The Mobile eXperience (MX) division is also facing headwinds. Seasonal slowdowns, intensified competition from Apple in North America, and aggressive pricing by Chinese brands in markets like India have eroded profitability. Analysts estimate the MX division’s Q4 operating profit at 2.4 trillion won, with smartphone profits accounting for just over 2 trillion won, down 400 billion won from the same period last year.
Other consumer electronics, including TVs and home appliances, are similarly grappling with increased competition from Chinese manufacturers and rising marketing expenses. The display segment has also been hit hard by inventory adjustments and sluggish demand from major clients, with its Q4 operating profit projected to plunge from 2 trillion won in 2023 to about 900 billion won in 2024.
Shin Seok-han, an analyst at Daishin Securities, said Samsung’s recovery is unlikely until the second quarter of 2025, when a semiconductor market rebound and expanded HBM supply could help lift earnings.
