Samsung Disappoints Again, and It's Still Because of Chips

© Samsung

The year 2025 is not getting off to a flying start for Samsung Electronics. The South Korean giant has published its provisional results for the fourth quarter 2024, from September to December, and expects results well below forecasts.

29% drop compared to the previous quarter

The company should thus record an operating profit of 4.5 billion dollars, while analysts were expecting revenues of 5.3 billion dollars. While this is a nice increase of 131% compared to the same period last year, experts note above all a decrease of 29% compared to the third quarter.

This mixed result is part of a trend that continues for Samsung Electronics. The situation is such that last October, a prominent executive of the group published a letter of apology. The company has also begun a restructuring aimed at focusing on advanced manufacturing and high-end memory chips.

Because it is mainly on the semiconductor side that Samsung is encountering significant difficulties, particularly because it has fallen significantly behind in the crucial field of artificial intelligence (AI). The group is therefore increasing its efforts to supply high-end memory chips to Nvidia, which directly affects its research and development spending.

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At CES 2025 in Las Vegas, the manufacturer's CEO, Jensen Huang, explained that Samsung had to ” design a new design “. These difficulties benefit its big rival, SK Hynix, which already supplies Nvidia. Its share price climbed 23% last year; Samsung's fell by 32%.

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The device division also falls

The division that designs and makes logic chips, including CPUs, GPUs and other specialized processors, is also struggling. It is likely to widen its operating loss to about $1.5 billion in the fourth quarter, compared with about $960 million in the previous quarter. The reasons include, among other things, the slowdown in demand for smartphones and less robust production in factories.

And to top it all off, the Korean giant's devices unit (phones, TVs, household appliances) has also seen its performance plummet, particularly due to increased competition.

Samsung will publish its official quarterly results on January 31, but this initial assessment is obviously not a good omen…

• Samsung Electronics has released its preliminary results for the fourth quarter, and expects results to fall well short of expectations.
• The South Korean giant is expected to see its operating profit fall by 29% compared to the previous quarter.
• This is due in particular to significant spending on research and development to make up for lost ground in AI.

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