Samsung Electronics sees limited Q4 operating profit on weakened chip performance

On the corporate front, Samsung Electronics posted a rather lackluster operating profit in the fourth quarter, due to a sluggish performance by its chip division.

Our Lee Soo-jin reports.

South Korean tech giant Samsung Electronics posted a solid performance for the year but its fourth-quarter results fell short of market expectations as its semiconductor division posted a sluggish performance.

The chipmaker reported on Friday an annual operating profit of more than 32 trillion won, or around 22 billion U.S. dollars, up 3-hundred-98 percent compared to the previous year.

And sales came to around 206 billion dollars, up around 16 percent on-year.

This marks the second time that the company recorded annual sales in the 200 billion dollar range after it did so for the first time in 2022.

But despite the company's solid performance for the year, its fourth-quarter operating profit failed to meet market expectations.

While this was expected to log more than 5 billion dollars, it came in at 4-point-4 billion dollars.

This comes as the operating profit from the device solution division responsible for semiconductor technology research and development fell slightly compared to the previous quarter, coming in at only around 2 billion dollars in the October to December period.

This, according to the company was due to high research and development costs,.. as well as expenses spent on expanding its advanced process production capacity.

The company spent a record 7 billion dollars on research and development in the fourth quarter.

As for the first quarter this year, only a modest improvement is expected as global demand for chips remains weak.

But a turnaround may be seen in future quarters as Bloomberg reported on Friday that Samsung Electronics was cleared to supply its fifth generation eight-layer HBM3E chips to NVIDIA.

The South Korean chipmaker's 12-layer version of the chips is still undergoing NVIDIA's quality verification tests.

Lee Soo-jin, Arirang News.