Samsung Electronics announced on Wednesday a significant annual decline of 34% in operating profit for the last quarter, attributing the slump to sluggish demand for its TVs and other consumer electronics products. This downturn offset the gains from a gradually recovering computer chip market.
The South Korean tech giant expressed optimism about the prospects for its business in 2024, foreseeing increased demand for semiconductors, particularly those powering artificial intelligence (AI) features increasingly integrated into smartphones, personal computers, and various other products. However, it acknowledged the potential impact of ongoing macroeconomic uncertainties on its near-term performance.
For the three months ending in December, Samsung reported an operating profit of 2.8 trillion won ($2.1 billion), down from 4.3 trillion won ($3.2 billion) in the same period the previous year. The company's operating profit for the entirety of 2023 stood at 6.5 trillion won ($4.8 billion), marking an 85% decline from 2022 and representing its lowest figure since 2008, during the global financial crisis.
Although Samsung's semiconductor division incurred losses of 14.9 trillion won ($11 billion) throughout 2023, the losses narrowed in the fourth quarter, with the DRAM business returning to profitability. Samsung previously announced plans in October to more than double its production capacity of advanced high-bandwidth memory chips in 2024 to meet the demands driven by AI applications.
"In 2024, the memory business expects the market to continue to recover despite various potential obstacles, including interest rate policies and geopolitical issues," Samsung stated in a press release.
Additionally, the company is actively promoting its latest smartphone model, the Galaxy S24, which boasts an array of new features enabled by AI technology. These features include live translation during phone calls in 13 languages and 17 dialects, reflecting Samsung's commitment to leveraging AI innovations in its products to enhance user experience and drive sales growth.
