Samsung Electronics Co. Ltd. ((SSNLF)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Samsung Electronics Co. Ltd.’s recent earnings call presented a mixed sentiment, reflecting both challenges and accomplishments. While the company faced a decline in overall revenue and operating profit, significant strides in their Memory and Foundry businesses were highlighted, alongside sustainability efforts in the latest Galaxy S25 series. Amidst these challenges, Samsung remains committed to strategic investments and innovations to foster future growth.
Record High Fourth Quarter Revenue in Memory Business
Despite market challenges, Samsung’s Memory business achieved a record high in fourth quarter revenue. This was primarily driven by strong demand for high-value-added memory products, including HBM and server DRAM, showcasing the company’s resilience in this segment.
Strong Performance in Advanced Foundry Technologies
The Foundry business experienced growth, particularly in advanced node processes. Samsung is actively developing 2-nanometer GAA technology, and stable yields have been observed in 4-nanometer technology for high-performance computing (HPC) products, further cementing their position in advanced foundry technologies.
Sustainability Initiatives and Innovations
Samsung’s commitment to sustainability is evident in the new Galaxy S25 series, which includes features like recycled cobalt and plastics. These efforts contribute to a more circular system in battery and semiconductor manufacturing, aligning with global sustainability trends.
Overall Revenue Decline
Samsung reported a 4% decline in overall revenue quarter-on-quarter, totaling KRW 75.8 trillion. The decrease was notably significant in the DS Division, attributed to rising competition and challenging market conditions.
Decline in Operating Profit
Operating profit saw a substantial decrease of KRW 2.7 trillion quarter-on-quarter. This decline was influenced by soft market conditions for IT products and increased R&D expenditures, impacting the company’s profitability.
Weakness in Semiconductor and Display Markets
The semiconductor and display markets continued to show weakness, with a conservative outlook for the Display segment. This was due to sluggish demand in the smartphone and IT markets, posing additional challenges for Samsung.
Forward-Looking Guidance
In the forward-looking guidance, Samsung outlined expectations for 2025, indicating limited performance improvement in the first quarter due to semiconductor market weaknesses. However, the company plans to enhance growth through smartphone sales and AI experiences in premium segments. With increased CapEx and a scheduled dividend payout, Samsung is setting a strategic path for future growth.
In conclusion, Samsung Electronics navigates a challenging landscape with a mix of setbacks and successes. The earnings call highlighted a decline in some business segments but also shed light on significant achievements in Memory and Foundry businesses, along with sustainability initiatives. As Samsung looks forward, their strategic investments and focus on innovation aim to drive future growth, offering a hopeful outlook amidst current challenges.
