Samsung Electronics Co yesterday said that its fourth-quarter profit rose 15 percent from a year earlier, a smaller-than-expected gain as the world’s largest maker of smartphones and memory chips struggles to revive growth.
The South Korean company reported in its earnings preview that it recorded 6.1 trillion won (US$5.1 billion) in operating profit for the October-December quarter, compared with 5.3 trillion won a year earlier.
Samsung was expected to report 6.6 trillion won in operating profit, according to financial data provider FactSet.
Sales stayed nearly flat at 53 trillion won, also slightly lower than expectations. It did not give net profit or other details, which will be announced at the end of this month.
The preliminary results showed that the company’s annual operating profit likely posted a slight gain from 2014 after posting more than 30 percent fall in 2014 from 2013.
However, analysts estimated that its annual net income dropped for a second time in three years last year after hitting a peak in 2013, as explosive growth in its mobile business, which once accounted for two-thirds of its profit, came to a stunning halt.
Analysts have recently lowered their forecasts on Samsung’s earnings for the final quarter of last year, citing weak global demand for personal computers and smartphones that hurt its semiconductor business.
Its memorychip and mobile processor business have helped partially outweigh its profit fall from sales of its own smartphones.
Korea Investment & Securities analyst Yoo Jongwoo said sluggish iPhone sales pushed down demand for memory chips and mobile processors at Samsung.
They said Samsung’s consumer electronics division was likely its only division that showed a recovery during the quarter thanks to seasonally high demand and a fall in LCD panel prices.
WASHINGTON’S INCENTIVES: The CHIPS Act set aside US$39 billion in direct grants to persuade the world’s top semiconductor companies to make chips on US soil The US plans to award more than US$6 billion to Samsung Electronics Co, helping the chipmaker expand beyond a project in Texas it has already announced, people familiar with the matter said. The money from the 2022 CHIPS and Science Act would be one of several major awards that the US Department of Commerce is expected to announce in the coming weeks, including a grant of more than US$5 billion to Samsung’s rival, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), people familiar with the plans said. The people spoke on condition of anonymity in advance of the official announcements. The federal funding for
HIGH DEMAND: The firm has strong capabilities of providing key components including liquid cooling technology needed for AI servers, chairman Young Liu said Hon Hai Precision Industry Co (鴻海精密) yesterday revised its revenue outlook for this year to “significant” growth from a “neutral” view forecast five months ago, due to strong demand for artificial intelligence (AI) servers from cloud service providers. Hon Hai, a major assembler of iPhones that is also known as Foxconn, expects AI server revenues to soar more than 40 percent annually this year, chairman Young Liu (劉揚偉) told investors. The robust growth would uplift revenue contribution from AI servers to 40 percent of the company’s overall server revenue this year, from 30 percent last year, Liu said. In the three-year period
LONG HAUL: Largan Energy Materials’ TNO-based lithium-ion batteries are expected to charge in five minutes and last about 20 years, far surpassing conventional technology Largan Precision Co (大立光) has formed a joint venture with the Industrial Technology Research Institute (ITRI, 工研院) to produce fast-charging, long-life lithium-ion batteries for electric vehicles, mobile electronics and electric storage units, the camera lens supplier for Apple Inc’s iPhones said yesterday. Largan Energy Materials Co (萬溢能源材料), established in January, is developing high-energy, fast-charging, long-life lithium-ion batteries using titanium niobium oxide (TNO) anodes, it said. TNO-based batteries can be fully charged in five minutes and have a lifespan of 20 years, a major advantage over the two to four hours of charging time needed for conventional graphite-anode-based batteries, Largan said in a
Taiwan is one of the first countries to benefit from the artificial intelligence (AI) boom, but because that is largely down to a single company it also represents a risk, former Google Taiwan managing director Chien Lee-feng (簡立峰) said at an AI forum in Taipei yesterday. Speaking at the forum on how generative AI can generate possibilities for all walks of life, Chien said Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) — currently among the world’s 10 most-valuable companies due to continued optimism about AI — ensures Taiwan is one of the economies to benefit most from AI. “This is because AI is