DRAM enterprise posts revenue in 4Q, goals to boost management in DDR5 and handle demand for HBM

Average first-half earnings restoration on macro uncertainties; 2H to indicate extra vital enchancment

Samsung Electronics right this moment reported monetary outcomes for the fourth quarter and the fiscal yr 2023.


The Firm posted KRW 67.78 trillion in consolidated income and KRW 2.82 trillion in working revenue within the quarter ended December 31, 2023. For the total yr, it reported KRW 258.94 trillion in annual income and KRW 6.57 trillion in working revenue.


Fourth quarter income and working revenue elevated from the third quarter based mostly on improved efficiency in Reminiscence on account of larger costs, and continued energy in gross sales of premium show merchandise.


Within the first quarter of 2024, the Firm will give attention to bettering profitability by rising gross sales of excessive value-added merchandise. The element companies purpose to satisfy demand for superior merchandise and people aimed for generative AI whereas the Gadget eXperience (DX) Division will strengthen AI options in smartphones and different shopper merchandise.


The reminiscence market and demand for IT are anticipated to proceed recovering in 2024, although macroeconomic uncertainties stay to be seen. The Firm will meet demand for semiconductors for AI purposes and broaden into AI-enabled shopper product markets. On the identical time, the Firm will strengthen its management in premium merchandise and competitiveness in advanced-node semiconductors.


As ongoing macroeconomic uncertainties are anticipated to weigh on the enterprise atmosphere within the near-term, the Firm expects earnings within the first half of 2024 to indicate a average enchancment, with a extra vital enchancment anticipated to happen within the second half of the yr.


The Firm’s capital expenditures in 2023 reached a complete of KRW 53.1 trillion, together with KRW 48.4 trillion spent within the Gadget Options (DS) Division and KRW 2.4 trillion in Samsung Show Company (SDC). Within the fourth quarter, the whole was KRW 16.4 trillion, with KRW 14.9 trillion allotted to the DS Division and KRW 0.8 trillion to SDC.


Spending on reminiscence was targeting constructing out infrastructure on the facility in Pyeongtaek, Korea and enlargement of manufacturing capability of HBM, DDR5 and different superior nodes. Foundry investments centered on increasing the manufacturing capability of superior EUV nodes of 5 nanometers (nm) and beneath, in addition to infrastructure on the Firm’s manufacturing unit in Taylor, Texas. Show investments have been primarily made in IT OLED merchandise and versatile shows.



Semiconductor Demand To Get well Progressively in 2024

The DS Division posted KRW 21.69 trillion in consolidated income and KRW 2.18 trillion in working losses within the fourth quarter of 2023.


For the Reminiscence Enterprise, the general market confirmed a restoration in comparison with the earlier quarter, with content-per-box persevering with to extend for PC and cell. Server demand confirmed indicators of restoration as investments in generative AI expanded throughout the IT business.


The Reminiscence Enterprise additionally centered on increasing gross sales of excessive value-added merchandise, resulting in considerably larger gross sales of cutting-edge options like HBM, DDR5, LPDDR5x and UFS 4.0, amongst others. Because of this, its bit development exceeded market development, and stock depletion of DRAM and NAND accelerated. The DRAM enterprise posted a revenue on the again of upper costs.


Seeking to the primary quarter of 2024, PC and cell demand restoration is anticipated to proceed, whereas server and storage demand will present indicators of restoration, although market circumstances want shut monitoring. By way of business provide, bit development of cutting-edge merchandise is anticipated to face constraints throughout the market whereas shopper demand for advanced-node merchandise is predicted to remain robust. The Reminiscence Enterprise will give attention to responding to demand for cutting-edge merchandise and intends to enhance profitability by actively addressing demand for HBM and generative AI-related server SSDs.


In 2024, the Reminiscence Enterprise expects the market to proceed to get better regardless of numerous potential obstacles, together with rate of interest insurance policies and geopolitical points. For PC and cell, content-per-box is anticipated to develop as a result of influence from enlargement of on-device AI. So far as servers are involved, server replacements and transitions to new platforms will seemingly result in a gradual restoration in demand. Moreover, the Reminiscence Enterprise plans to give attention to profitability based mostly on the competitiveness of cutting-edge nodes.


For DRAM, the purpose is to boost management within the high-density DDR5 market and solidify competitiveness in HBM by ramping up the amount of next-generation HBM3E in a well timed method. For NAND, the Reminiscence Enterprise will reply to buyer demand for high-density storage by being the primary within the business to enter the cell QLC market, and by main the Gen5 SSD marketplace for generative AI purposes.


Due largely to stock changes and the collection of Exynos 2400 for a serious buyer’s flagship mannequin, the System LSI Enterprise noticed its earnings enhance within the fourth quarter.


Within the first quarter of 2024, gross sales of latest SoCs and high-pixel picture sensors are anticipated to stay robust. Nonetheless, demand for some SoCs is anticipated to say no, and earnings are prone to worsen — primarily for cell show driver IC (DDI) — so general earnings enchancment is predicted to be considerably restricted. Nonetheless, the introduction of on-device AI gives a chance to revive the will of shoppers to interchange their smartphones.


Though the smartphone market is anticipated to rebound in 2024, it’s believed that the normalization of chip costs and better monetary prices will erode set makers’ promotional capabilities, limiting demand development.


The System LSI Enterprise will safe future development engines by leveraging AI momentum and maximizing SoC, sensor and LSI enterprise competitiveness. It plans to constantly enhance on-device features like NPU efficiency enchancment and mannequin weight discount. For picture sensors, it would broaden gross sales of high-pixel sensors and DDIs and can obtain development, even in unsure environments, as IT gadgets undertake extra OLEDs.


The Foundry Enterprise noticed its earnings decline within the fourth quarter on account of a delay in international financial restoration. Regardless of these challenges, it’s actively growing 3nm and 2nm Gate-All-Round (GAA) know-how and plans to broaden into newly rising software segments utilizing superior course of applied sciences. Moreover, the Foundry Enterprise achieved its highest annual order backlog in 2023.


Within the first quarter of the yr, it expects the launch of latest merchandise together with AI smartphones and AI PCs to drive an enchancment in demand. Nonetheless, the continued development of shoppers decreasing stock might imply that earnings is not going to considerably get better. However, the Foundry Enterprise is targeted on bettering yield and optimizing the second-generation 3nm GAA course of. It is usually securing a 2nm AI accelerator order that features HBM and superior packaging.


As demand for smartphones and PCs steadily recovers in 2024, superior processes are anticipated to drive an strategy to 2022 ranges within the foundry market. The Foundry Enterprise will proceed steady mass manufacturing of the 3nm GAA course of, develop the 2nm course of and enhance orders for quick rising purposes akin to AI accelerators.



Cell Show To Deal with Smartphones and IT/Auto; Massive Show To Enhance Profitability

SDC posted KRW 9.66 trillion in consolidated income and KRW 2.01 trillion in working revenue for the fourth quarter.


For the cell show enterprise, the market demand for smartphones elevated barely year-on-year. Regardless of going through a number of challenges in the course of the quarter, SDC maintained its efficiency in comparison with the earlier quarter by guaranteeing a well timed provide for main prospects’ new merchandise and specializing in high-end merchandise in its product combine.


For the big show enterprise, though demand remained weak on account of unfavorable financial circumstances, SDC posted gross sales development and lowered losses backed by year-end seasonal TV demand.


Within the first quarter of 2024, SDC expects a decline in cell show enterprise earnings on account of intensifying competitors amongst panel producers and muted seasonal demand.


For the big show enterprise, regardless of challenges posed by weak demand and low season results, SDC will proceed its efforts to cut back losses by launching new QD-OLED displays and increasing its buyer base.


In 2024, the market demand for smartphones is anticipated to be sluggish as a result of international financial slowdown and extended regional conflicts. However, SDC goals to give attention to gross sales development based mostly on differentiated know-how and capabilities within the smartphone market, significantly within the extremely aggressive high-end phase. It additionally intends to strengthen its future development engines within the IT and Auto segments.


Though ongoing macroeconomic uncertainties pose challenges to the big show enterprise, SDC expects TV demand to get better reasonably, buoyed by upcoming sporting occasions. It is going to carefully monitor market developments and work in direction of bettering profitability by centering QD-OLED displays in its product combine, enhancing manufacturing effectivity and including capability with out extra investments.



MX Maintains Double-Digit Profitability, Will Turn into International Normal for Cell AI With Galaxy AI

The MX and Networks Companies posted KRW 25.04 trillion in consolidated income and KRW 2.73 trillion in working revenue for the fourth quarter.


Market demand for smartphones elevated barely quarter-on-quarter, pushed by the premium phase, regardless of continued inflation and geopolitical instability.


The MX Enterprise reported a decline in gross sales and revenue quarter-on-quarter on account of decrease smartphone gross sales, together with the fading of new-product results from flagship fashions launched within the third quarter. Nonetheless, pill shipments, led by new product releases, grew considerably and included wholesome gross sales of premium merchandise. Wearable gadgets additionally maintained gross sales momentum in the course of the peak vacation season.


Within the first quarter of 2024, smartphone market demand is anticipated to say no sequentially on account of seasonality, however the premium phase is anticipated to develop year-on-year. Accordingly, the MX Enterprise plans to leverage the newly launched Galaxy S24 collection — which brings superior AI capabilities and enhanced product competitiveness — to broaden gross sales of flagship merchandise. The MX Enterprise may even proceed to give attention to operational effectivity.


In 2024, smartphone market demand is anticipated to rebound as shopper sentiment stabilizes in anticipation of a world financial restoration, resulting in market development, particularly within the premium phase. Equally, the pill market is anticipated to get better, whereas the wearables market is forecasted to attain double-digit worth development for smartwatches and slight worth development for True Wi-fi Stereo (TWS) gadgets.


The MX Enterprise goals to steer the AI smartphone market by providing prospects a differentiated expertise by way of the combination of Galaxy AI within the S24 collection, whereas additionally enhancing the consumer expertise and optimizing Galaxy AI for foldable gadgets. By way of these efforts, the MX Enterprise goals to develop its annual flagship shipments at a double-digit charge and solidify its management within the foldable class.


As well as, the MX Enterprise will proceed to give attention to gross sales of premium gadgets for tablets. For wearables, it would try to raise the Galaxy ecosystem expertise, improve wellness features in smartwatches and enhance the smartphone connect charge by integrating AI applied sciences.


By way of these efforts, the MX Enterprise goals to attain income development and guarantee stable profitability by persevering with to optimize assets amid unstable market circumstances. Lastly, the MX Enterprise will strengthen R&D and funding in future development areas akin to generative AI, digital well being and XR.



Visible Show and Digital Home equipment To Lead the AI Period

The Visible Show and Digital Home equipment Companies posted KRW 14.26 trillion in consolidated income and KRW 0.05 trillion in working losses within the fourth quarter.


Total market demand for TVs elevated quarter-on-quarter within the fourth quarter, led by seasonality, however declined year-on-year on account of lowered consumption sentiments amongst superior markets.


The Visible Show Enterprise expanded its management within the premium market by specializing in promoting high-value-added merchandise — together with Neo QLEDs, OLEDs, and Large TVs above 75″ to preemptively reply to excessive demand in the course of the peak season, together with Black Friday.


Nonetheless, profitability decreased barely on a quarter-on-quarter and year-on-year foundation as a result of stagnant TV market demand and elevated prices amid intensified competitors.


Within the first quarter of 2024, general TV demand is anticipated to lower owing to seasonality, aside from the premium market, together with Neo QLEDs, OLEDs, and Large TVs above 75″, the place stable demand is projected.


The Visible Show Enterprise will amplify the excitement created by launching new premium fashions introduced at CES and its showcase occasion First Look and, with a purpose to give attention to gross sales of strategic merchandise and securing profitability, take a extra proactive strategy to selling differentiated merchandise and repair.


In 2024, alternative demand linked to international sporting occasions is anticipated to ease the decline in TV market demand steadily. Nonetheless, uncertainties surrounding numerous macro elements are anticipated to proceed.


The Visible Show Enterprise goals to innovate its premium and Way of life merchandise and diversify its lineup to satisfy numerous buyer wants. Moreover, it would lead the AI-screen period by persevering with to introduce improvements in hyper-connectivity and customised content material and providers, powered by its next-generation AI processor and Tizen working system.