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Samsung Q4 Earnings Mixed: Memory Strong, Other Divisions Wary

Source: Samsung Electronics

Seoul, South Korea - Samsung Electronics (KRX: 005930) reported Q4 and full-year results, showing modest revenue growth amid a recovering memory market but continued weakness in smartphones and displays.

Samsung posted a consolidated revenue of KRW 67.78 trillion, up 6% from Q3. 

Annual revenue for 2023 was KRW 258.94 trillion. Operating profit for Q4 was KRW 2.82 trillion, recovering from an operating loss in the previous quarter and KRW 6.57 trillion for the entire year.

Key figures by business

  • Memory Q4 2023 Revenue: KRW 21.69 trillion
  • Memory Q4 2023 operating loss: KRW 2.18 trillion
  • MX Q4 2023 revenue: KRW 25.04 trillion
  • MX Q4 2023 operating profit: KRW 2.73 trillion
  • DS Q4 2023 revenue: KRW 38.08 trillion
  • DS Q4 2023 operating loss: KRW 0.86 trillion

The details

The improved quarterly performance was mainly due to higher prices and sales of premium memory chips. Demand for PCs, mobile devices, and especially servers related to investments in AI computing began to recover. 

This led to a significant increase in sales of cutting-edge solutions such as HBM, DDR5, LPDDR5x, and UFS 4.0. 

As a result, Samsung's memory business swung to an operating profit after losses in Q2 and Q3.

Looking ahead, Samsung expects the memory market to continue to recover through 2024 despite potential headwinds such as interest rate policies and geopolitical issues.

However, Samsung's Device Solutions and Mobile Display businesses declined earnings due to sluggish smartphone sales and intense competition among display panel manufacturers. 

However, the company is developing advanced process technologies and expects demand for AI-related applications to improve in 2024.

The IT & Mobile business, which includes smartphones and wearables, also saw a decline in profit quarter-on-quarter due to slowing sales of flagship devices.

However, the premium segment remained strong, and the newly launched Galaxy S24 series is expected to boost sales in the coming quarter. 

Samsung expects the smartphone market to rebound in 2024, driven by stabilizing consumer sentiment and growth in the premium segment.

The more

The company has budgeted high capital expenditures again in 2024 to consolidate its leadership in advanced memory and foundry while expanding the production of smartphones, IT products, and automotive displays. 

Managing profitability amid uncertain demand remains an ongoing challenge.