Samsung Electronics said on Jan. 31 that its semiconductor (DS) division posted revenue of 30.1 trillion won ($20.7 billion) and operating profit of 2.9 trillion won in the fourth quarter of last year. While this marks a return to profitability compared to the same period in 2023, it fell short of market expectations of 3 trillion won.
For the year, the semiconductor division posted an operating profit of 15.12 trillion won, trailing SK Hynix’s 23.46 trillion won by more than 8 trillion won. This is the first time that Samsung’s annual chip operating profit has been lower than SK Hynix’s, excluding 2023 when both companies recorded losses.
Samsung’s consolidated fourth-quarter revenue totaled 75.78 trillion won, with operating profit of 6.49 trillion won. For the full year, the electronics giant reported total revenue of 300.9 trillion won and operating profit of 32.7 trillion won, the second-highest after 2022′s 302.23 trillion won. These results reflect an improvement over 2023, when the semiconductor sector faced challenges, with revenue of 258.94 trillion won and operating profit of 6.57 trillion won. However, annual operating profit fell short of market expectations, missing the consensus of 34.26 trillion won.
The underperformance was mainly due to the semiconductor business. While Samsung’s semiconductor division posted an operating profit of 6.45 trillion won in the second quarter buoyed by a recovery in memory chips, profits declined in the third quarter (3.86 trillion won) and fourth quarter, falling short of market expectations.
Analysts attribute the decline to weak demand for legacy memory chips, impacted by reduced PC and smartphone sales and China’s aggressive low-cost supply, as well as limited progress in high-bandwidth memory (HBM). Despite rising demand for HBM due to AI market growth, Samsung’s performance was hindered by ongoing quality testing of its HBM3E, the fifth generation HBM. The foundry and system LSI businesses likely continued to face losses as well.
In its smartphone segment, the device experience (DX) division recorded fourth-quarter revenue of 40.5 trillion won and operating profit of 2.3 trillion won.
Samsung also disclosed that it invested 17.8 trillion won in capital expenditures during the fourth quarter, bringing its total annual investment to a record 53.6 trillion won.