The year 2025 is not off to a flying start for Samsung Electronics. The South Korean giant has published its provisional results for the fourth quarter of 2024, running from September to December, and expects results well below predictions.
29% decrease compared to the previous quarter
The company should thus record an operating profit of $4.5 billion, while analysts expected revenues of $5.3 billion. If this is a nice increase of 131% compared to the same period of the previous year, experts especially note a drop of 29% compared to the third quarter.
This mixed result is part of a trend that continues for Samsung Electronics. The situation is such that last October, a prominent leader of the group published a letter of apology. The company also began a restructuring aimed at emphasizing advanced manufacturing and high-end memory chips.
Because it is especially on the semiconductor side that Samsung encounters significant difficulties, in particular because it has accumulated a significant delay in the oh-so-crucial field of artificial intelligence (AI). Thus, the group is increasing its efforts to provide high-end memory chips to Nvidia, which directly affects its research and development spending.
At CES 2025 in Las Vegas, the manufacturer’s CEO, Jensen Huang, explained that Samsung must “ come up with a new design “. These difficulties benefit its great rival, SK Hynix, which already equips Nvidia. Its stock price has risen 23% in the past year; that of Samsung fell by 32%.
The device division also falls
The division that designs and manufactures logic chips, that is to say CPUs, GPUs, and other specialized processors, is also slipping. It risks widening its operating losses to around $1.5 billion in the fourth quarter, compared to around $960 million in the previous quarter. This is due, among other things, to the slowdown in demand for smartphones and less robust production in factories.
And to top it all off, the Korean giant’s devices unit (telephones, TV, household appliances) also saw its performance plummet, in particular due to increased competition.
Samsung will publish its official quarterly results on January 31, but this first assessment obviously does not bode well…
- Samsung Electronics released its preliminary results for the fourth quarter, and expects results well below predictions.
- The South Korean giant is expected to see its operating profit fall 29% from the previous quarter.
- In particular, significant spending on research and development to make up for the gap in AI.
