Samsung Electronics posts 129.85% jump in Q4 operating profit

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Samsung Electronics posts 129.85% jump in Q4 operating profit

Samsung Electronics reported a 129.85% year-on-year surge in Q4 2024 operating profits but faced a decline from the previous quarter due to chip demand struggles. Operating profit reached 6.5 trillion won, while net income rose 22.2%. Concerns about technological competitiveness persist.


Samsung Electronics reported a 129.85% year-on-year surge in Q4 2024 operating profits but faced a decline from the previous quarter due to chip demand struggles. (AP Photo / Ahn Young-joon)

Samsung Electronics said Friday its operating profits surged 129.85 percent year-on-year in the fourth quarter of 2024, but fell from the previous quarter as it struggled to meet demand for chips used in artificial intelligence servers.

The company is the flagship subsidiary of South Korean giant Samsung Group, by far the largest of the family-controlled conglomerates that dominate Asia's fourth-largest economy.

Samsung's Chips ‘Facing a Crisis’?

The announcement comes after the world's largest memory-chip maker acknowledged in October it was facing a "crisis" and that questions had arisen about its "fundamental technological competitiveness and the future of the company".

Operating profit from the October to December period was 6.5 trillion won ($4.5 billion), up from 2.82 trillion won a year earlier, Samsung said in a regulatory filing.

But Bloomberg on Friday reported Samsung has obtained approval to supply a "version of its fifth-generation high-bandwidth memory chips" to Nvidia, citing people familiar with the matter.

Blessing in disguise?

China's startup DeepSeek recently unveiled its R1 chatbot that has apparently shown the ability to match the capacity of US AI pace-setters for a fraction of the investments made by American companies.

The Chinese startup has said it used less-advanced H800 chips — permitted for export to China until late 2023 — to power its large learning model.

The news hammered tech firms Monday, with Nvidia collapsing almost 17 percent and wiping almost $600 billion from its market capitalisation -- a record single-day loss for a publicly traded company.

Tuesday saw a tech rebound, with Nvidia surging 8.8 percent, but DeepSeek's arrival has still raised questions about whether the vast sums invested in AI in the past few years have been overdone.

"While Samsung faces fundamental technology headwinds, DeepSeek's claims have challenged the fundamental economics and investments for ongoing AI waves," Counterpoint's Shah said.

"This 'frugal innovation' could potentially slow down or stretch the hundreds of billions of dollars in AI infrastructure investments over the years," he said.

"So, this could be a 'blessing in disguise' for Samsung, allowing them to take the time needed to perfect their solution or to lower costs," he added.

Shares in Samsung were down 2.42 percent in early trade in Seoul.

Disclaimer: This story has been published from a wire agency feed without modifications to the text.

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