Samsung profits tumble 34 per cent after chip business hits rock bottom

Samsung has reported a 34 per cent drop in operating profits in its fourth quarter, in line with expectations, and new lows for its chip business, although it expects this to recover in 2024.

The South Korean electronics maker said on Wednesday that operating profit fell to 2.8t won (£1.7bn) in the three months ended December, compared to 4.3t won (£2.5bn) a year earlier.

Shares were down 2.4 per cent on Wednesday morning.

Samsung’s chip business plunged to a record loss for the full year, down to 14.9t won (£8.8bn) as weak demand for devices that use the silicon continued to bite.

But the world’s largest chip maker said it expects chip demand to improve in 2024.

“We expect the memory business to continue to recover despite volatility linked with interest rate policies, reduced industry production, and other factors,” Samsung said.

The company added it expects smartphone and computer makers to place higher orders as the use of artificial intelligence (AI), which requires more advanced chips, rapidly grows.

Rival chipmaker SK Hynix has also recently said it expects chip prices to go up this year as clients look to restock dwindling supplies.