Samsung’s Profit Estimates Rises But AI Chip Challenges Lowers The Expectations

Samsung Electronics has released its earnings estimates for the fourth quarter of 2024 and it shows a rise in profit compared to the same period last year. For the entire year of 2024, Samsung’s revenue surged from $177 billion in 2023 to $206 billion. The annual profit also increased from $4.51 billion to $22.48 billion.

The company’s operating profit reached approximately $4.46 billion and it is more than double what it reported in Q4 2023. Estimated revenue for the Q4 stands at around $51.5 billion and it is a 10.7% increase from Q4 2023.

While the operating profit shows a growth, it is still about 15.7% lower than forecasts. This could be due to the low performance in the high-end memory market and Samsung’s HBM3E memory chips development for Nvidia being delayed due to Samsung not yet received the necessary certification.

Nvidia requires high bandwidth memory (HBM) for its AI products, and while Micron and SK Hynix are also in the HBM production space, Samsung has not yet received the necessary certification from Nvidia (Samsung, SK Hynix, and Micron are the only companies making HBM chips). Nvidia’s CEO has expressed his confident that Samsung is capable of producing these memory chips with after some redesigns.

In response to its recent performance, Samsung has made changes within its semiconductor division, including a reshuffle of top executives. Samsung is making steps in the development of its next-generation HBM4 chips. The company aims to begin mass production of these chips in a 4nm process by the end of the year.

Please note that these details are according to Samsung’s earnings estimates. The actual financial results along with breakdowns by division, are expected to be announced later this month.