Samsung’s preliminary earnings for Q4 2024 have missed market expectations, with the company reporting a significant drop in operating profits. The expected operating profit for the quarter stands at $4.47 billion, a decrease from the anticipated $5.26 billion. This dip in profitability comes as a result of weaker demand in the IT product sector, particularly for PC and mobile electronics.
Memory Business Breaks Records Amidst Industry Challenges
While the broader semiconductor division faced a slowdown, Samsung’s memory business stood out with record-breaking sales. The surge in sales was attributed to a rise in demand for high-capacity memory products, particularly in the data center and cloud sectors. This success in the memory unit led to the announcement of a performance bonus for employees, amounting to 200% of their base salary—the highest ever posted by the Device Solutions (DS) division.
Non-Memory Business and Mobile Division Experience Decline
In contrast, Samsung’s non-memory semiconductor business struggled during the quarter. Lower operating rates and rising R&D expenses in this segment contributed to its decreased performance. The Device Experience (DX) division, responsible for Samsung’s consumer electronics products, also faced challenges. Increased competition and a lower-than-expected impact from new mobile product launches contributed to the decline in the DX division’s business.
Challenges in Advanced Memory Chip Development for AI
Adding further complexity to Samsung’s challenges, Nvidia CEO Jensen Huang remarked during the 2025 Consumer Electronics Show (CES) that Samsung has encountered difficulties in developing high-bandwidth memory (HBM) chips for artificial intelligence (AI) applications. Despite these setbacks, Huang expressed confidence in Samsung’s ability to overcome the hurdles, noting that the company is “working very fast” to address the issues.
Memory Chip Testing Issues with Nvidia
Earlier in 2024, Samsung’s HBM chips underwent a round of rigorous testing conducted by Nvidia, during which they initially failed. Although these chips were later cleared for use in July, the testing issues highlighted the challenges Samsung faces in keeping pace with competitors like SK Hynix and TSMC in the highly competitive memory chip market.
Full Q4 2024 Results to Be Announced on January 31
Samsung has yet to release its full financial results for Q4 2024. The final report, expected on January 31, will offer a more comprehensive look at the company’s performance during the quarter. Analysts will be closely watching these results to gauge the long-term impact of the challenges Samsung is currently facing in the semiconductor sector.
Frequently Asked Questions (FAQ)
1. Why did Samsung’s Q4 2024 operating profit fall short of expectations?
Samsung’s Q4 2024 operating profit fell below expectations primarily due to weaker demand for PC and mobile electronics, coupled with a decline in its non-memory semiconductor business. The company’s memory division saw record sales, but this wasn’t enough to offset losses in other areas.
2. What caused the surge in Samsung’s memory business sales?
Samsung’s memory business achieved record sales in Q4 2024 thanks to a significant increase in demand for high-capacity memory products, particularly driven by the growing needs in data centers and cloud computing.
3. How did Nvidia respond to Samsung’s memory chip struggles?
Nvidia CEO Jensen Huang acknowledged that Samsung had faced difficulties in producing HBM chips for AI but expressed confidence that the company would overcome these issues. He noted that Samsung is “working very fast” to resolve the challenges and will likely succeed in the long run.
4. What is the significance of Samsung’s HBM chip testing with Nvidia?
Samsung’s HBM chips initially failed tests conducted by Nvidia in May 2024, raising concerns about their readiness for advanced AI applications. However, the chips were eventually cleared for use, highlighting both the challenges and potential of Samsung’s high-end memory technology.
5. When will Samsung release its full Q4 2024 results?
Samsung is scheduled to release its full Q4 2024 financial results on January 31, 2025. This report will provide a detailed overview of the company’s performance during the quarter, including updates on its semiconductor and memory businesses.
