Samsung Electronics announced its earnings estimates for the fourth quarter of 2024. The company's profit more than doubled compared to Q4 2023, but its earnings still missed market expectations due to lingering issues in its AI memory chips and foundry.
Samsung's Q4 2024 operating profit was $4.46 billion
According to Samsung's earnings estimates, its revenue during Q4 of 2024 will be around KRW 75 trillion ($51.5 billion). That is 10.7% higher than its revenue from a year earlier (Q4 2023). It estimates to achieve an operating profit of around KRW 6.5 trillion ($4.46 billion), more than double its operating profit from a year earlier.
Remember, these are just estimates from the company, and the final revenue and operating profit figures, along with division-wise results, will be revealed later this month.
For the whole year (2024), the company's revenue jumped from KRW 258.94 trillion ($177 billion) to KRW 300.8 trillion ($206 billion), while its profit jumped from KRW 6.57 trillion ($4.51 billion) in 2023 to KRW 32.73 trillion ($22.48 billion) in 2024.
Why were Samsung's Q4 2024 earnings lower than market expectations?
The company's operating profit is 15.7% lower than market estimates, and that is due to lackluster performance in the high-end memory market. The company has been trying for months to get Nvidia's certification for its HBM3E memory chips, but the company hasn't managed to get it yet.
Nvidia is the world's biggest maker of AI processors, and those chips need high bandwidth memory (HBM). Micron, Samsung, and SK Hynix are the only ones making HBM chips. However, Samsung is the only one that has not been able to get Nvidia's certification to supply HBM (HBM3E) chips.
At CES 2025, Nvidia CEO Jensen Huang said Samsung needs to redesign its HBM3E chips but also showed its vote of confidence, saying the South Korean company is capable of doing it. Nvidia recently certified Samsung's HBM3 chips to be used in Nvidia's lower-tier AI processors designed for the Chinese market.
So, what is Samsung doing to improve its performance in the HBM market? Last year, the company apologized for disappointing results and then made a major reshuffle of high-level executives in its semiconductor division.
What about Samsung's HBM4 chips?
While it remains to be seen if Samsung can solve overheating issues in its HBM3E chips in time, the company is already working on HBM4 chips and is confident it can complete the development and start mass production using its 4nm process by the end of this year.
