Samsung Electronics Posts Weakest Earnings in Over a Decade in 2023 Despite Chip Recovery

By Kwanwoo Jun

Samsung Electronics posted its weakest annual earnings in more than a decade after net profit fell 73% in the final quarter of 2023, though the technology giant's flagship semiconductor business narrowed losses on a recovery in demand driven by the artificial-intelligence boom.

The South Korean maker of memory chips, smartphones and televisions said Wednesday that net profit was 6.345 trillion won ($4.77 billion) for the fourth quarter, compared with KRW23.842 trillion a year earlier and KRW5.844 trillion in the previous quarter.

Revenue for the quarter stood at KRW67.780 trillion, with operating profit coming in at KRW2.825 trillion, largely in line with the company's preliminary estimates.

For the full year, revenue fell 14% to KRW258.936 trillion, operating profit plunged 85% to KRW6.567 trillion--the weakest since 2009--and net profit dropped 72% to KRW15.487 trillion--the lowest since 2011.

The company said its memory-chip segment remained in the red for a fourth consecutive quarter, with losses narrowing to KRW2.180 trillion from well over KRW3 trillion in the third quarter. The segment's quarterly losses topped KRW4 trillion in the first two quarters.

Samsung said its DRAM business turned profitable in the final quarter of 2023, which bolstered market hopes for the segment to continue to improve as semiconductor prices rise and demand surges for powerful memory chips used in AI systems.

Earlier this month, Samsung unveiled its latest Galaxy S24 flagship smartphones with generative-AI features, marking the industry's largest-scale embrace of the new technology.

Samsung said pre-orders for the Galaxy S24 devices in its home market of South Korea reached 1.21 million units in the first week, a new record for its Galaxy S series.

The Galaxy S24's release comes as Samsung is wrestling with flagging smartphone sales.

Last year, Apple dethroned Samsung as the world's largest smartphone maker by volume--a position the South Korean company had held for more than a decade.

--Jiyoung Sohn contributed to this article.

Write to Kwanwoo Jun at kwanwoo.jun@wsj.com

(END) Dow Jones Newswires

January 30, 2024 19:50 ET (00:50 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.