Samsung predicts a rebound in the market for digital products in 2024 after a drop in fourth-quarter earnings

Samsung predicts a rebound in the market for digital products in 2024 after a drop in fourth-quarter earnings

Samsung predicts a rebound in the market for digital products in 2024 after a drop in fourth-quarter earnings

The biggest memory chip manufacturer in the world said that as artificial intelligence becomes more widely used, mobile and PC manufacturers can anticipate to add more and better processors to their products. The necessity to replace old servers will also steadily enhance demand.

While consumer demand remained sluggish in many companies, Samsung Electronics reported a 34% year-over-year fall in fourth-quarter earnings despite a spike in memory prices, pointing to a further rebound in memory chips and technology demand in 2024.

The biggest memory chip manufacturer in the world said that as artificial intelligence becomes more widely used, mobile and PC manufacturers can anticipate to add more and better processors to their products. The necessity to replace old servers will also steadily enhance demand.

"In 2024, the memory business estimates the market to continue strengthening despite various potential headwinds, including interest rate policies as well as geopolitical problems", Samsung said in a statement.

In keeping with its earlier-this-month prediction of 2.8 trillion won, Samsung said that its operating profit for the October–December period dropped to 2.8 trillion won ($2.11 billion), from 4.3 trillion won a year earlier.

Its semiconductor business is expected to have a record loss of 14.9 trillion won for the whole year in 2023, compared to a profit of 23.8 trillion won in the previous year.

However, compared to every other quarter in 2023, Samsung's traditional cash cow business—which generated billions of dollars in revenue—saw an unprecedented slowdown in memory chip sales as a result of the low demand for the chips' usage in devices. As a result, the company's fourth-quarter earnings increased. A loss occurred.

As memory chip prices increased, the memory chip industry's losses shrank to 2.18 trillion won in the fourth quarter from 3.75 trillion won in the third.

Following a prolonged period of depletion of their own supplies, memory chips were restocked by Chinese PC and mobile manufacturers throughout the quarter.

Revenue decreased 4% in the fourth quarter to 67.8 trillion won.