Samsung’s chip business is showing signs of recovery as the company posted a profit from its DRAM business for the first time in a year in the fourth quarter of 2023, after a tough year for the South Korean tech giant hit by the global economy. recession
The company said on Wednesday it posted operating profit of 2.82 trillion won and revenue of 67.78 trillion won in the fourth quarter, down 34.4% and 3.8% from a year earlier, respectively.
For the full year 2023, Samsung recorded 6.57 trillion won in operating profit and 258.94 trillion won in revenue, down 84.9% and 14.3% from 2022, respectively, and its worst performance in more than a decade, both affected by lower demand for consumer products. and chip market downcycles.
The tech giant’s chip business, traditionally its main profit generator, recorded a 14.9 trillion won operating loss for the full year, as Samsung was hit hard by a global chip market slowdown starting in late 2022, as were its memory chip rivals SK Hynix and Micron. Declining demand forced production output of the chips to drop.
However, its chip business narrowed its losses in the fourth quarter with an operating loss of 2.18 trillion won, significantly better than the previous quarter when it posted an operating loss estimated in the 4 trillion won range. Samsung also said it profited from DRAM on the back of higher prices.
Demand for DRAM in the server sector showed signs of recovery in the fourth quarter as investment in generative AI spread across the IT industry, the South Korean tech giant noted. More chips were also shipped as content-per-box continued to grow for PC and mobile, the company added.
Looking ahead, Samsung said chip demand is expected to gradually recover in 2024 while demand for high-end chips is expected to be particularly strong thanks to expanding AI applications across industries.
Meanwhile, the company’s mobile business reported 2.73 trillion won in operating profit for the fourth quarter. Samsung said the business unit, known by the company as MX Business, maintained its double-digit profit in the quarter.
Demand for the smartphone market is expected to pick up again in 2024, especially in the premium segment, from expectations of global economic recovery, the company said.
Samsung will lead the “AI smartphone market” with Galaxy AI in the Galaxy S24 series. The company will also improve Galaxy AI to optimize it for its foldable device and ultimately continue to show double-digit growth rates in shipments of its flagship smartphone, Samsung added.