Samsung Electronics reported a significant drop in its fourth-quarter operating profit, despite posting better-than-expected revenue. The company’s operating profit fell 29.3% on a quarter-on-quarter basis, while revenue slipped 4%. Revenue rose about 12% from last year, but growth was slower than expected.
The South Korean electronics giant attributed the decline to increased R&D expenses and initial ramp-up costs for new technology production capacity. Samsung also faces intense competition in the memory business, where SK Hynix has gained ground on its flagship high-bandwidth memory products.
Samsung’s mobile experience and networks businesses saw a quarter-over-quarter decrease in sales and profit due to fading effects of new flagship smartphone model launches. However, the company plans to drive growth with new flagship models, particularly its Galaxy S25 series, and push into the AI smartphone market.
Despite the challenges, Samsung’s annual revenue reached the second-highest on record, surpassing only last year’s figure. The company aims to enhance technological and product advantages in AI by 2025 and drive sales growth in premium segments.
Shares of Samsung Electronics fell 2.2% in South Korea on Friday morning, while SK Hynix stock declined over 11%. The decline was attributed to pressure from the latest artificial intelligence model from China’s DeepSeek that threatens to upend the US-led AI ecosystem.
Source: https://www.cnbc.com/2025/01/31/samsung-fourth-quarter-profit-falls-short-of-estimates-as-ai-demand-remains-strong.html