By Joyce Lee and Heekyong Yang
SEOUL (Reuters) -Samsung Electronics flagged a continued recovery in memory chips and tech demand in 2024, after reporting a 34% on-year drop in fourth-quarter profit despite a memory price rebound, as consumer demand remained weak in many businesses.
The world’s biggest maker of memory chips said it expected mobile and PC makers to place more and better chips in devices as use of artificial intelligence expands, while the need to replace older servers would also aid a gradual recovery in demand.
“In 2024, the memory business expects the market to continue to recover despite various potential obstacles, including interest rate policies and geopolitical issues,” Samsung said in a statement.
Samsung said operating profit fell to 2.8 trillion won ($2.11 billion) in October-December, versus 4.3 trillion won a year earlier, and in line with Samsung’s own estimate of 2.8 trillion won flagged earlier this month.
For the full year, its chip business swung to a record loss of 14.9 trillion won in 2023 from a 23.8 trillion won profit a year earlier.
However, fourth-quarter profit improved from every other quarterly profit in 2023, when an unprecedented memory chip downturn caused by weak demand for gadgets that use chips caused billions of dollars in operating losses for Samsung’s historical cash cow business, chips.
Losses in the memory chip business shrank to 2.18 trillion won in the fourth quarter, versus a 3.75 trillion won loss in the third quarter, as memory chip prices have rebounded.
Chinese PC and mobile makers began to restock memory chips during the quarter, after using up their own stocks for so long.
Fourth-quarter revenue fell 4% to 67.8 trillion won.
($1 = 1,328.5300 won)
(Reporting by Joyce Lee and Heekyong Yang; Editing by Sonali Paul)
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