Samsung’s Q4 2024 preliminary earnings are “significantly below market expectations”, with the company claiming in a statement that sales and profits in its semiconductor division “fell due to worsening business conditions centered on IT products.”
Announced this week, fourth-quarter operating profit is expected to be $4.47 billion, a decrease on the $5.26bn that analysts had expected.
Despite Samsung noting a weak demand for PC and mobile electronics products, the company said its memory business achieved recording breaking sales during Q4 2024, attributed to an increased demand for high-capacity products.
In late 2024, it was reported that as a result of these record-breaking sales workers in Samsung’s memory business unit would receive a performance bonus equivalent to 200 percent of their base salary, the highest Target Achievement Incentive (TAI) figure ever posted by the company’s Device Solutions (DS) division.
Samsung’s non-memory business decreased during the quarter as a result of lower operating rates and increased R&D expenses, while the company’s Device Experience (DX) division also saw business fall due to intensified competition and weaker effectiveness of new mobile product launches.
The company’s full Q4 2024 results will be released on January 31.
The news comes as Nvidia CEO Jensen Huang said during a press conference at the Consumer Electronics Show (CES) in Las Vegas that Samsung has struggled to produce new advanced memory chips for AI. However, Huang added that the company was “working very fast” to overcome the challenges, saying “They are working on it. They will succeed, no question they will succeed.”
Despite posting significant profits over successive financial quarters, Samsung has been unable to keep pace with SK Hynix or TSMC, its biggest competitors in the memory chip and contract chip manufacturing markets.
In May 2024, it was reported that Samsung's high bandwidth memory (HBM) chips had failed tests run by Nvidia. They were eventually cleared for use by the GPU giant in July.
