Samsung Electronics Faces 85% Profit Plunge In 2023

[Seoul, January 9, 2024] — South Korean tech giant Samsung Electronics has disclosed its preliminary financial report, revealing an 85% drop in profits for the fiscal year 2023. The preliminary verified data showcases an operating profit of 65.4 trillion Korean won, reflecting an 84.92% year-on-year decline.

Q4 2023 Operating Profit Decline and Revenue Figures

The data further illustrates a significant 35.03% year-on-year decrease in operating profit during the fourth quarter of 2023, reaching 28 trillion Korean won. Analysts, with an average expectation of 37 trillion Korean won, were slightly surpassed. The reported sales revenue amounted to 67 trillion Korean won, marginally below analysts' predictions of 70.31 trillion Korean won.

DRAM Demand Challenges Amid Economic Uncertainty

These results underscore the impact of ongoing economic uncertainty on Samsung's performance, particularly in the demand for Dynamic Random-Access Memory (DRAM) for smartphones and other electronic devices, which continues to face challenges.

Samsung's Forward-Looking Perspective

In October, Samsung foresaw a gradual rebound in the DRAM market in 2024, driven by the surge in artificial intelligence. Senior management at Samsung indicated that DRAM prices were expected to recover from the low point around the second half of 2023.

Anticipated Price Movements in Semiconductor Market

According to TrendForce's data, mobile DRAM chip prices are projected to rise by 18%-23% in the fourth quarter of 2023, while mobile NAND flash memory chip prices are expected to experience a 10%-15% increase.

Samsung's Strategic Focus on High-Density DRAM

Samsung Electronics aims to narrow the gap with competitor SK Hynix in the emerging high-density DRAM sector. The company plans to boost production capacity by 2.5 times in 2024. This strategic move aligns with the current industry trend, with High Bandwidth Memory (HBM) playing a pivotal role. HBM, an advanced chip capable of high-speed data processing, is integrated with hardware such as NVIDIA accelerators to expedite data-intensive operations like AI model training.