Samsung Q4 Semiconductor Operating Profit 2.9 Trillion Won

Sluggish Performance in Memory Semiconductors and HBM
Last Year's Operating Profit Reaches 32.7 Trillion KRW
Surges 398% Due to Base Effect
Sales Increase 16% to 300 Trillion KRW

Samsung Electronics posted an operating profit of 2.9 trillion KRW in its semiconductor business in the fourth quarter of last year due to sluggish performance in general-purpose memory semiconductors and high-bandwidth memory (HBM). However, on a consolidated basis, the operating profit for the entire year was preliminarily estimated at 32.726 trillion KRW, a 398.34% increase compared to the previous year, due to a low base effect, the company announced on the 31st. Sales increased by 16.2% year-on-year to 300.8709 trillion KRW.

This is the second time Samsung Electronics’ annual sales have reached the 300 trillion KRW mark, following 2022 (302.2314 trillion KRW). Net profit rose 122.45% to 34.4514 trillion KRW. Fourth-quarter operating profit was 6.4927 trillion KRW, falling short of market expectations. Fourth-quarter sales recorded 75.7883 trillion KRW, down 4% from the previous quarter.

The Device Solutions (DS) division, which attracted the most attention, posted sales of 30.1 trillion KRW and an operating profit of 2.9 trillion KRW. The core of the performance, memory, continued to face weak demand for mobile and PC applications. However, sales of HBM and high-capacity DDR5 for servers expanded, raising the average selling price (ASP) of DRAM and achieving a record high quarterly sales. Operating profit slightly declined from the previous quarter due to increased research and development (R&D) expenses and initial ramp-up costs for expanding advanced process production capacity. System LSI and foundry (semiconductor contract manufacturing) also saw a decrease in operating profit due to weak mobile demand and increased R&D costs.

Just before the earnings announcement, news emerged that HBM3E (5th generation) had passed Nvidia’s quality verification. Bloomberg in the U.S. reported, citing anonymous sources, that "Samsung Electronics’ HBM3E received supply approval from Nvidia." However, Samsung did not issue an official response. The DX division recorded sales of 40.5 trillion KRW and an operating profit of 2.3 trillion KRW in the fourth quarter of last year. Mobile Experience (MX), responsible for smartphones, saw a decline in smartphone sales due to reduced effects from flagship new model launches, resulting in lower sales and operating profit compared to the previous quarter. The TV and home appliance business experienced weakened profitability due to intensified competition among companies.