There were signs of a recovery in the memory chip market as early as the final quarter of 2023. The market leader Samsung is therefore confident about this year.
Despite signs of recovery in the memory chip market, industry leader Samsung again recorded significant losses in profits in the fourth quarter.
The surplus fell by 73.4 percent year-on-year to 6.34 trillion won (4.4 billion euros), as the South Korean company announced. Sales fell by 3.8 percent to 67.78 trillion won (47 billion euros). Samsung Electronics expects a moderate recovery in profitability for the first half of the year and an even more significant improvement for the second half.
The chip division again closed with an operating loss. However, the deficit narrowed to 2.18 trillion won from 3.75 trillion won in the third quarter. The memory chip business has recovered quarter-on-quarter, it said. The demand for smartphones has also increased. However, according to market researchers, the US company Apple displaced its rival from South Korea from the top of the largest smartphone providers last year.
For the full year 2024, South Koreans recorded a 14 percent decline in sales to 258.94 trillion won. Net profit across all divisions fell by 72 percent to 15.49 trillion won.
Oversupply of chips
An oversupply in the chip industry coupled with sluggish demand had long been a problem for Samsung. Recently, however, “general demand appears to have recovered as customer inventories normalize,” the company said. There was a greater need for storage for PCs and mobile devices. The demand for servers for artificial intelligence has also remained strong. In addition, price increases played a role in expanding inventories.
Samsung expects the industry’s recovery to continue this year. Risks include fluctuations in interest rate policy and declining industrial production.
Samsung is also confident about developments in the smartphone market. Consumer sentiment is expected to stabilize and demand to pick up in anticipation of a soft landing for the global economy. Demand for more expensive models in particular is likely to drive growth. The analysis firm IDC recently reported that Apple sold 234.4 million iPhones last year. Samsung came to 226.6 million.
Source: Stern
