Samsung Releases 2023 Financial Report, Charts Strategies for 2024

Samsung Electronics, a global technology leader, has unveiled its financial results for the fourth quarter and fiscal year 2023, showcasing both challenges and strategic initiatives for the upcoming year.
Galaxy S23 from SamsungIn the quarter concluding on December 31, 2023, Samsung reported KRW 67.78 trillion in revenue and KRW 2.82 trillion in operating profit. The full-year results were equally impressive, revealing KRW 258.94 trillion in revenue and KRW 6.57 trillion in operating profit.

The positive trend in the fourth quarter was attributed to enhanced Memory performance, driven by increased prices, and sustained demand for premium display products, as highlighted by Samsung Electronics. However, the DS Division posted KRW 21.69 trillion in revenue with KRW 2.18 trillion in operating losses during the same period.

SDC reported KRW 9.66 trillion in revenue and KRW 2.01 trillion in operating profit, while the MX and Networks Businesses achieved KRW 25.04 trillion in revenue and KRW 2.73 trillion in operating profit. The Visual Display and Digital Appliances Businesses posted KRW 14.26 trillion in revenue but faced operating losses of KRW 0.05 trillion in the fourth quarter.

Looking ahead to Q1 2024, Samsung Electronics aims to bolster profitability by focusing on high-value-added products. The component businesses will strive to meet the demand for advanced products and those designed for generative AI. Simultaneously, the DX Division plans to enhance AI features in smartphones and other consumer products.

Anticipating a recovery in the memory market and increased demand for IT in 2024, Samsung Electronics plans to meet the demand for semiconductors for AI applications and expand its presence in AI-enabled consumer product markets. The company also aims to strengthen its position in premium products and advanced-node semiconductors.

Samsung Electronics projects a moderate improvement in earnings for the first half of 2024, with a more significant upswing expected in the second half of the year.

In terms of capital expenditures for 2023, Samsung invested KRW 53.1 trillion, with KRW 48.4 trillion allocated to the DS Division and KRW 2.4 trillion to SDC. Notably, Q4 Capex were KRW 16.4 trillion, with KRW 14.9 trillion dedicated to the DS Division and KRW 0.8 trillion to SDC.

The tech giant foresees a surge in demand for high-quality chips, driven by the increasing integration of advanced components in mobile and PC devices and the growing use of artificial intelligence. Additionally, Samsung anticipates a gradual recovery in demand due to the necessity to replace older servers.

However, the full-year results for 2023 reveal a record loss of KRW 14.9 trillion in the chip business, marking a significant shift from the KRW 23.8 trillion profit recorded in the previous year. The downturn was primarily attributed to weak demand for gadgets utilizing chips.

Samsung’s strategy for its memory business in 2024 involves a focus on cutting-edge chips, including high bandwidth memory (HBM) and server products crucial for generative AI. The company maintains its capital spending, contrasting with competitors who have cut their investments, aiming to expand production capacity for these advanced chips.

Despite losing its 12-year reign as the world’s top smartphone seller to Apple in 2023, Samsung is poised for a comeback. The company plans to achieve double-digit growth in annual flagship smartphone shipments in 2024, driven by the latest premium smartphones with AI functionalities, intensifying competition with Apple. Furthermore, Samsung aims to solidify its lead in the foldable phone market, facing challenges from competitors such as Google, Motorola, Honor, and Oppo as they expand their offerings.