Samsung Electronics exceeded revenue expectations in the fourth quarter, but its operating profit declined significantly from the previous quarter. The company attributed the drop to higher R&D costs in its chip segment. Despite this, Samsung's memory business achieved record revenue driven by demand for its AI-focused products. Looking ahead, Samsung anticipates continued weakness in its semiconductor business but expects growth through premium devices and AI smartphones.
Samsung Electronics reported better-than-expected fourth-quarter revenue, although its operating profit dropped sharply from the previous three months due to higher research and development ( R&D ) expenses in its chips segment. The company's revenue rose about 12% from the same period last year, while operating profit grew about 130%, year on year. However, operating profit fell nearly 30% and revenue slipped by over 4%, quarter on quarter.
Samsung attributed the decline in operating profit to increased R&D expenses to secure future technology leadership and the initial ramp-up costs to secure production capacity for cutting-edge nodes. \Despite the quarterly dip, Samsung's memory business achieved a record-high fourth-quarter revenue of 30.1 trillion won, helped by demand for its advanced memory products used for AI applications. The company is a leading manufacturer of memory chips, which are utilized in devices such as laptops and servers, and is also the world's second-largest player in the smartphone market. Samsung said it expects its earnings to remain weak in the current quarter due to weakness in its semiconductor business. However, it will pursue growth through AI smartphones and other premium devices. For the full year, Samsung reported KRW 300.9 trillion in revenue and KRW 32.7 trillion in operating profit. In 2023, the company posted an annual revenue of KRW 258.94 trillion and an operating profit of KRW 6.57 trillion. 'For 2025 as a whole, the Company plans to enhance technological and product advantages in AI, continue to meet future demand for high-value-added products and drive sales growth in premium segments,' it added.\ Samsung Electronics' chip business posted an operating profit of KRW 2.9 trillion in the fourth quarter, down over 25% from the three months ending in October. Samsung and SK Hynix both provide DRAM, or dynamic random access memory, products — a type of semiconductor memory needed for data processing. However, SK Hynix has left Samsung behind in HBM, or high bandwidth memory, a type of DRAM, in which chips are vertically stacked to save space and reduce power consumption. According to Samsung, its memory business is cutting down legacy products to better align with market demand and increasing its proportion of high value-added products, such as HBM. 'In 2025, overall memory market demand is expected to recover from the second quarter,' Samsung said, warning that its earnings are expected to remain weak in the current quarter
SAMSUNG ELECTRONICS CHIPS MEMORY OPERATING PROFIT R&D AI SMARTPHONES SEMICONDUCTOR REVENUE
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