Samsung admits fiscal trouble in Q4 2024, plans to make more money in 2025 via AI phones
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Predictions, wishes, and bets are off the table: Samsung has officially released its earnings report for the fourth quarter of 2024, showing an increase in revenue and profit compared to 2023. That, however, doesn't tell the whole story, as there are some issues to be discussed.
The tech giant falls short of market expectations. That's "thanks" to some pretty substantial challenges in the memory chip sector (and as a whole, the global economic uncertainty).
The company's revenue for Q4 2024 reached ~$52.1 billion, reflecting an 11.8% increase from the same period in 2023. Operating profit rose to ~$4.46 billion, marking a 29.9% year-on-year growth. Despite these gains, operating profit remained almost 16% below market forecasts, largely due to weak demand for semiconductor chips used in AI servers and personal computing devices.
Samsung has been facing difficulties with its high-bandwidth memory (HBM) chips. Reports indicate that its HBM3E chips have yet to receive certification from Nvidia for use in the company’s AI accelerators, which are widely used by major technology firms such as Amazon, Google, Meta, Microsoft, and OpenAI.
The semiconductor division, Samsung Semiconductor, reported sales of ~$20.68 billion and an operating profit of ~$1.99 billion for the quarter.
In the mobile segment, the company continues to face strong competition from Chinese brands such as Oppo, Vivo, and Xiaomi, contributing to a decline in operating profit from its smartphone business during Q4 2024
For the full year, the company reported total revenue of ~$206 billion and an operating profit of ~$22.47 billion. Compared to 2023, revenue increased by 16.2%, making it the second-highest in Samsung's history, while profit saw a nearly fivefold increase of 498%.
Looking ahead, Samsung anticipates continued challenges due to several factors, including US restrictions on advanced chip sales to China, intensifying competition from Chinese firms, and the weak Korean currency.
The Mobile eXperience (MX) and Networks businesses posted ~$17.8 billion in consolidated revenue and ~$1.45 billion in operating profit for the fourth quarter.
For reference, in 2023, the MX and Networks businesses raked in ~$17.3 billion in consolidated revenue, but ~$1.9 billion in operating profit for the fourth quarter.
To address these challenges, the company aims to improve profitability through higher sales of premium and foldable smartphones featuring AI-driven innovations. In the semiconductor sector, Samsung intends to focus on advancing key technologies to maintain competitiveness, while its display division, Samsung Display Corporation, seeks to strengthen its position in the high-end display panel market.
The tech giant falls short of market expectations. That's "thanks" to some pretty substantial challenges in the memory chip sector (and as a whole, the global economic uncertainty).
Samsung has been facing difficulties with its high-bandwidth memory (HBM) chips. Reports indicate that its HBM3E chips have yet to receive certification from Nvidia for use in the company’s AI accelerators, which are widely used by major technology firms such as Amazon, Google, Meta, Microsoft, and OpenAI.
Additionally, while its HBM chips have reportedly experienced overheating issues, leading to shipment delays, competition and lower pricing have impacted earnings from other memory chips.
The semiconductor division, Samsung Semiconductor, reported sales of ~$20.68 billion and an operating profit of ~$1.99 billion for the quarter.
In the mobile segment, the company continues to face strong competition from Chinese brands such as Oppo, Vivo, and Xiaomi, contributing to a decline in operating profit from its smartphone business during Q4 2024
For the full year, the company reported total revenue of ~$206 billion and an operating profit of ~$22.47 billion. Compared to 2023, revenue increased by 16.2%, making it the second-highest in Samsung's history, while profit saw a nearly fivefold increase of 498%.
Looking ahead, Samsung anticipates continued challenges due to several factors, including US restrictions on advanced chip sales to China, intensifying competition from Chinese firms, and the weak Korean currency.
For reference, in 2023, the MX and Networks businesses raked in ~$17.3 billion in consolidated revenue, but ~$1.9 billion in operating profit for the fourth quarter.
The MX Business reported a QoQ decrease in sales and profit, in part due to the fading effects of new flagship model launches. [...] In the first quarter of 2025, the MX Business plans to drive sales growth based on its flagship models, particularly the newly launched Galaxy S25 series, and will continue to lead the AI smartphone market through promotion of new AI experiences and product competitiveness.
– Samsung Newsroom, January 2025
To address these challenges, the company aims to improve profitability through higher sales of premium and foldable smartphones featuring AI-driven innovations. In the semiconductor sector, Samsung intends to focus on advancing key technologies to maintain competitiveness, while its display division, Samsung Display Corporation, seeks to strengthen its position in the high-end display panel market.
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