By Shantini Mogan
31 JANUARY: Samsung Electronics reported on Friday that its operational profits for the fourth quarter of 2024 increased by 129.85% year over year, but decreased from the previous quarter due to difficulties meeting demand for processors used in AI servers.
The business is the flagship division of the massive South Korean conglomerate Samsung Group, which is by far the biggest of the family-run businesses that govern the fourth-largest economy in Asia.The statement follows the largest memory-chip manufacturer in the world admitting in October that it was in a “crisis” and that concerns had been raised over its “fundamental technological competitiveness and the future of the company.”
Samsung reported in a regulatory filing that its operating profit for the October–December period was 6.5 trillion won (US$4.5 billion), up from 2.82 trillion won the previous year.According to the Yonhap News Agency, which referenced its own financial statistics agency, net earnings surpassed market estimates.Nevertheless, the company’s operating profit for the fourth quarter was less than the 9.18 trillion won it made in the previous quarter.
This is because of “soft market conditions, especially for IT products, and an increase in expenditures including R&D,” Samsung stated on Friday.”Weakness in the semiconductors business may limit overall earnings improvement in the first quarter of 2025,” it stated.According to Shah of Counterpoint, “DeepSeek’s claims have challenged the fundamental economics and investments for ongoing AI waves, even though Samsung faces fundamental technological headwinds.
“He said that the hundreds of billions of dollars spent on AI infrastructure over the years might be slowed down or extended by this “frugal innovation.” Therefore, he continued, “this might be a ‘blessing in disguise’ for Samsung, enabling them to take the time required to refine their solution or to reduce costs.” Early trading in Seoul saw a 2.42% decline in Samsung shares.
