Samsung’s chip business is showing signs of recovery. For the first time in a year, the company reported a profit from its DRAM business in the fourth quarter of 2023.
2023 has been a difficult year for the South Korean tech giant due to the global economic recession.
The company said on Wednesday it recorded an operating profit of almost 2 billion euros and revenue of almost 47 billion euros in the fourth quarter, a decline of 34.4% and 3. 8%, respectively, compared to the previous year.
Worst performance in 10 years
For the year 2023, Samsung recorded an operating profit of 4.5 billion euros and a turnover of 180 billion euros, a decrease of 84.9% and 14.3%. respectively, compared to 2022. This is its worst performance in more than a decade, due to weak product demand and the down cycle in the chip market.
Like its rivals SK Hynix and Micron, Samsung was hit hard by the slowdown in the global chip market that began in late 2022 and was forced to reduce its chip production due to falling demand.
However, its chip business reduced its loss in the fourth quarter with an operating loss of 1.5 billion euros, which is significantly better than previous quarters which showed operating losses of around 2. 8 billion euros. Samsung also said it made a profit in DRAM memory thanks to rising prices.
The grace of generative AI
DRAM demand in the server sector showed signs of recovery during the fourth quarter as investments in generative AI expanded across the IT industry, the South Korean tech giant noted . More chips have also been shipped as per-box content continues to increase for PC and mobile.
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 the expansion of AI applications in all areas. Industries.
Meanwhile, the company’s mobile business recorded an operating profit of €1.9 billion in the fourth quarter. Samsung said the business unit, called MX Business by the company, maintained double-digit profitability during the quarter.
Good hopes with the S24
Demand in the smartphone market is expected to rebound in 2024 on anticipation of a global economic recovery, particularly in the premium segment, the company said.
Samsung will lead the “artificial intelligence smartphone market” with Galaxy AI on the Galaxy S24 series.
The company will also improve Galaxy AI to optimize it for its foldable devices and ultimately continue to see a double-digit growth rate in its flagship smartphone shipments, Samsung added.
Source: “ZDNet.com”