Samsung Electronics, the South Korean technology giant, has reported a significant decline in its operating profit for the last quarter of 2023. The company's annual operating profit dropped by 34% due to sluggish demand for its TVs and other consumer electronics products. Despite this setback, Samsung remains optimistic about the future, citing a slowly recovering computer chip market and increased demand for semiconductors.
For the three months ending in December, Samsung's operating profit reached 2.8 trillion won ($2.1 billion), compared to 4.3 trillion won ($3.2 billion) during the same period the previous year. The company's full-year operating profit for 2023 was 6.5 trillion won ($4.8 billion), marking a significant 85% decline from 2022 and the lowest since 2008, when the global markets experienced a financial crisis.
While Samsung's semiconductor division faced losses of 14.9 trillion won ($11 billion) in 2023, the losses narrowed in the fourth quarter as the DRAM business returned to profitability. In response to the growing demand for artificial intelligence (AI) features in smartphones, personal computers, and other products, Samsung announced its plans to expand production capacity of advanced high-bandwidth memory chips in 2024.
Despite macroeconomic uncertainties, Samsung expects its business to improve throughout 2024. The company foresees larger demands for semiconductors, which power AI functionalities, as well as a continued recovery in the memory market. However, challenges such as interest rate policies and geopolitical issues could potentially impact its performance in the near-term.
To drive sales and maintain its competitiveness, Samsung is focusing on the launch of its latest smartphone, the Galaxy S24. This new device boasts various AI-driven features, including live translation during phone calls in 13 languages and 17 dialects. By integrating AI technology into its products, Samsung aims to provide enhanced user experiences and stay ahead in the highly competitive smartphone market.
As the world gradually moves towards a more AI-centric future, Samsung is positioning itself to meet the rising demand for semiconductors and AI-powered products. With its commitment to technological innovation and anticipation of market recovery, the company aims to regain its financial strength and maintain its position as one of the industry leaders.
