Earlier this month, Samsung published earnings guidance for the fourth quarter of 2024. It estimated its revenue to be 10% higher and operating profit to be more than double the numbers from the previous year. Today, the company has published its final earnings figures for Q4 2024.

The company's revenue and profits rose in Q4 2024 compared to the previous year, but it still missed the market's expectations mainly due to memory chip issues and weak economic conditions.

Samsung Electronics Q4 2024 revenue was nearly 10% higher than Q4 2023

Samsung revealed that its revenue in Q4 2024 was KRW 75.8 trillion ($52.1 billion), which is 11.8% higher than the revenue it generated in Q4 2023. Its operating profit was KRW 6.5 trillion ($4.46 billion), which is 29.9% higher than the same quarter in the previous year.

While these figures may seem positive, things are not looking good for the company. Samsung's operating profit missed market expectations by 15.7%. That is primarily due to weak sales of semiconductor chips for AI servers and personal computing devices.

The company has been having issues with its high-bandwidth memory (HBM) chips. Reports indicate that it could not get its HBM3E chips certified by Nvidia to be used in the latter's flagship AI accelerators (GPUs) used by companies like Amazon, Google, Meta, Microsoft, and OpenAI.

Samsung's cash cow has always been its memory chip business, but that seems to be struggling. While its HBM chips are said to be facing overheating issues, leading to delays in shipments, its DRAM (RAM) chips and NAND (storage) chips aren't earning much money due to competition and lower prices.

The company's semiconductor chips unit, Samsung Semiconductor, saw sales of KRW 30.1 trillion ($20.68 billion) and an operating profit of KRW 2.9 trillion ($1.99 billion) in the quarter.

Samsung's smartphone business is also facing fierce competition from Chinese brands like OPPO, Vivo, and Xiaomi. So, the operating profit from its mobile business fell during Q4 2024. Its home appliances and TV business, Samsung DX, also saw its profit decline during the quarter due to rising competition and costs.

Overall, the company spent KRW 10.3 trillion ($7.08 billion) on research and development in Q4 2024 and a record KRW 35 trillion ($24.06 billion) throughout last year (2024).

If you look at the company's annual earnings for the entire year of 2024, its revenue was 300.87 trillion ($206 billion), while the operating profit reached KRW 32.7 trillion ($22.47 billion).

Compared to the previous year, its revenue rose 16.2%, marking it the second-highest revenue in the company's history. Its profit jumped 498% (nearly 5x) compared to the previous year.

What is Samsung's business outlook for the year 2025?

Samsung said its business is expected to remain weak due to multiple reasons, including US sanctions on sales of advanced chips to China, rising competition from Chinese firms, and weak Korean currency.

The South Korean firm said it plans to improve profits through higher sales of high-end and foldable phones equipped with “differentiated AI” features. It also plans to increase the sales of ultra-large and high-end TVs.

In the semiconductor segment, the company plans to develop key technologies to remain competitive. Samsung Display Corporation, its display manufacturing division, intends to strengthen its leading position in the high-end display panel segment.

Image Credits: Samsung

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