South Korea’s most valuable company, Samsung Electronics, has posted a fourth-quarter profit of 2.82 trillion won ($2.1 billion), down 34% from operating profit a year earlier. Samsung Electronics shares fell as much as 1.2% in early morning trading in Seoul on Wednesday, Bloomberg reported.
Samsung informed that its net income had fallen 74% in the last three months of the year to 6.02 trillion won ($4.5 billion) as its chip-making business went from a profit of 23.8 trillion won in 2022 to a record loss of 14.9 trillion won in 2023 owing to weak demand for gadgets using its chips, reported Reuters.
“In 2024, the Memory Business expects the market to continue to recover despite various potential obstacles, including interest rate policies and geopolitical issues. For PC and mobile, content-per-box is expected to grow due to the impact from expansion of on-device AI.,” Samsung said in a statement.
Samsung is aiming to catch up with its Korean rivals like SK Hynix in the high-bandwidth memory, or HBM chips segment. These chips are used by Nvidia’s accelerators in training artificial intelligence and have been amongst the most promising markets, Bloomberg reported.
The company is also hoping that its new Galaxy S24 series will help boost its smartphone sales. The S24 series features a ton of AI capabilities including live translation during phone calls, Circle to Search, and more.
What are analysts saying?
Lee Seung-Woo, an analyst at Eugene Investment & Securities, while speaking about Samsung Electronics’ share price to Bloomberg said, “The share price is weak because its HBM lags behind SK Hynix and its foundry business is significantly behind TSMC. If Samsung improves on the two fronts, there may be expectations for better share price performance. But at the moment, there’s little expectation.”
The article originally appeared on Livemint.