Samsung Electronics' Performance This Year Driven by Semiconductor and Galaxy S24 Dual Pillars

'Apple Backyard' Galaxy S24 Unveiled at SAP Center
Smartphones and Semiconductors Lead Earnings Improvement
Securing AI Technology Competitiveness Is Key

The unveiling of the ‘Galaxy S24’ series is being interpreted as "no different from a declaration of war thrown deep into enemy territory." Many also analyze it as a "life-or-death move."

The SAP Center is about 9.4 km in a straight line from Apple Park, the headquarters of competitor Apple. It takes only about 15 minutes by car, making it very close. Apple, which has collaborated with American professional sports for a long time and broadcasts games live on Apple TV, also sells Apple Watch bands emblazoned with the emblem of the San Jose Sharks of the National Hockey League (NHL). The San Jose Sharks use the SAP Center as their home arena. For this reason, the SAP Center is effectively Samsung Electronics’ ‘enemy’s backyard.’ The move to unveil the Galaxy S24 here with a secret weapon can be seen as carrying a message beyond just the event itself. It reflects confidence in the fierce competition with Apple expected this year, as well as a strong determination to overcome the recent crisis of falling to second place in the industry.

On the 17th (local time), Samsung Electronics held a new product launch event, "Samsung Galaxy Unpacked 2024," in San Jose, California, USA, unveiling the "Galaxy S24 Series." The photo shows Tae-moon Roh, President of Samsung Electronics' MX Division, holding the Galaxy S24 Series. Photo by Samsung Electronics

Samsung Electronics is expected to kick off efforts to reclaim the top spot in the industry and improve performance, using the Galaxy S24 unveiling as a signal. The company is showing signs of positioning smartphones and semiconductors, which have been its mainstay and breadwinners, as the ‘two pillars’ again this year.

Due to the global economic downturn, performance in these two sectors was poor last year, so the industry’s attention is focused on whether a rebound will occur. According to market research firm IDC, Samsung Electronics’ annual smartphone shipments last year totaled 226.6 million units (19.4%), losing the global smartphone shipment number one position for the first time to Apple, which recorded 234.6 million units (20.1%). Samsung also lost its top position in semiconductors. According to market research firm Gartner, Samsung Electronics recorded semiconductor sales of $39.9 billion last year, conceding first place after two years to Intel, which posted $48.7 billion. As a result, Samsung Electronics recorded its lowest operating profit in 15 years, and last year’s performance fell short of expectations.

In need of a change in momentum, Samsung took the first step with the unveiling of the Galaxy S24 series. Attention is focused on whether the Galaxy S24, equipped with AI features, will demonstrate more advanced functions than previous Galaxy models. The Galaxy S24 series will be available for pre-order in South Korea from the 19th to the 25th and will be released sequentially worldwide, including South Korea, starting on the 31st of this month.

No Tae-moon, President of the Mobile Experience (MX) Division, expressed confidence at the unveiling event, stating, "The Galaxy S24 will open a new era of mobile AI phones beyond the smartphone era." Extensive promotion of the Galaxy S24 will follow. Immediately after the unveiling event, ‘Galaxy Experience Spaces’ will open in eight cities: Seoul, Bangkok, New York, London, Paris, Berlin, Barcelona, and Dubai. These events will allow smartphone users to directly experience the new Galaxy S24. At the Gangwon Winter Youth Olympic Games, which open on the 19th, there will also be opportunities to introduce the Galaxy S24 to the world. A ‘Samsung Galaxy Olympic Experience Center’ will be set up at the Gangneung Olympic Park to help visitors try out the main features of the new product.

Positive signals are emerging in the semiconductor market. Experts predominantly predict a shift from last year’s recession to a boom this year. In line with this, Samsung Electronics has emphasized bold research and development (R&D), technological competitiveness, and talent acquisition since the beginning of the year. On the 10th, Vice Chairman Lee Jae-yong visited Samsung Research and said, "In difficult times, proactive R&D and unwavering investment are necessary," adding, "Let’s challenge more boldly and fiercely."

Kyung Kye-hyun, President of the Device Solutions (DS) Division, after attending the world’s largest IT and electronics exhibition ‘CES 2024,’ stated on social media that "a new opportunity has arrived" with the advent of the AI era. He further explained that after the emergence of ChatGPT, "the computing environment has transformed into a ‘Generative System’ that generates new information based on given inputs," predicting that this change will dominate the future semiconductor market and hinting at AI technology development and integration.

Following an emergency meeting held the previous afternoon, President Kyung and other DS Division executives took the unprecedented step of freezing salaries for this year. An executive from the DS Division said, "The salary freeze is a clear message reflecting the current crisis and a necessary measure to maintain tension for overcoming the crisis," adding, "By sharing the pain collectively, we will definitely achieve a return to profitability this year and lay the foundation for long-term growth."