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Samsung Electronics Co Ltd Earnings - Analysis & Highlights for Q4 2024
Overview
PositivesNegativesOutlook
- The company achieved a double-digit growth in revenue in the large display business compared to the previous quarter, with an increase in TV sales due to year-end seasonal demand.
- The company expects to achieve YoY revenue growth by progressively increasing the portion of its sales from advanced technology backed by robust AI/HPC demand.
- Profits for the mobile display business declined QoQ due to sluggish smartphone demand and rising competition.
- Operating profit decreased slightly compared to the previous quarter due to the increases in both R&D expenses and initial ramp-up cost to expand production capacity for cutting-edge nodes.
- The company expects a slower-than-anticipated recovery in demand for some of its major customers, which could limit earnings improvement in H1.
- The company expects NAND bit growth to decline by a low-teens percentage Q-and-Q in Q1.
- NAND bit growth is expected to decline by a low-teens percentage Q-and-Q in Q1.
- The memory market is expected to show weak business conditions in the short term.
- The growth rate of the premium segment is expected to slow down slightly compared to the previous year.
- The company expects a slower-than-anticipated recovery in demand for some of its major customers, which could limit its earnings improvement in H1.
Q&A Highlights from Samsung Electronics Co Ltd Earnings Call Q4 2024
- Analyst asked about the execution plan for the remaining KRW 7 trillion and if it is part of the current return policy.
- The company plans to return KRW 10 trillion worth of shares over 12 months, starting with buybacks and cancellations worth KRW 3 trillion. The details of the remaining KRW 7 trillion are under review, and the company will share more details when they are concrete.
- The company plans to return KRW 10 trillion worth of shares over 12 months, starting with buybacks and cancellations worth KRW 3 trillion. The details of the remaining KRW 7 trillion are under review, and the company will share more details when they are concrete.
- Analyst asked about the memory business performance in Q4.
- The memory markets saw more significant inventory adjustments by mobile and PC clients than expected, which deepened already weak demand. Demand for server DRAM was relatively solid, also for SSDs. The company saw a substantial increase in ASP versus the third quarter, with HBM sales increasing by 1.9 times, sales of 128-gigabyte or higher DDR5 modules increasing by 2.5 times. However, the overall memory business posted a record high fourth quarter quarterly sales, but profitability decreased due to an increase in R&D spend and early ramp-up expenses from advanced node capacity expansion.
- The memory markets saw more significant inventory adjustments by mobile and PC clients than expected, which deepened already weak demand. Demand for server DRAM was relatively solid, also for SSDs. The company saw a substantial increase in ASP versus the third quarter, with HBM sales increasing by 1.9 times, sales of 128-gigabyte or higher DDR5 modules increasing by 2.5 times. However, the overall memory business posted a record high fourth quarter quarterly sales, but profitability decreased due to an increase in R&D spend and early ramp-up expenses from advanced node capacity expansion.
- Analyst asked about the impact of DeepSeek on the HBM or the overall HBM industry.
- The company does not expect any significant impact on the HBM industry due to DeepSeek. However, the company is closely monitoring industry developments based on different scenarios and intends to respond to the quickly changing market on a timely basis.
- The company does not expect any significant impact on the HBM industry due to DeepSeek. However, the company is closely monitoring industry developments based on different scenarios and intends to respond to the quickly changing market on a timely basis.
- Analyst asked about the company's view on the policy risks from the Trump administration's agenda.
- The company acknowledged the potential impacts of the Trump administration's policies on their global operations and supply chains. They stated that they closely monitor geopolitical developments and will develop responses to address potential changes.
- The company acknowledged the potential impacts of the Trump administration's policies on their global operations and supply chains. They stated that they closely monitor geopolitical developments and will develop responses to address potential changes.
- Analyst asked about the company's memory business outlook for the first quarter.
- The company expects a decline in sales for DRAM and NAND, due to inventory adjustments and weak demand from mobile and PC customers. They plan to accelerate the conversion to more advanced process nodes and expand supply of high-density QLC SSDs for servers.
- The company expects a decline in sales for DRAM and NAND, due to inventory adjustments and weak demand from mobile and PC customers. They plan to accelerate the conversion to more advanced process nodes and expand supply of high-density QLC SSDs for servers.
- Analyst asked about the company's strategies to enhance competitiveness in the on-device AI market.
- The company plans to focus on expanding sales of optimized HBM3E products and starting up mass production of HBM4 in the second half of the year. They also intend to expand supply of server DDR5 products and lead industry trends toward higher density with their 128 gigabyte and 256 gigabyte memory products. For NAND, they plan to actively address demand for high-density SSDs, including QLC, to reinforce their leading position in the server space.
- The company plans to focus on expanding sales of optimized HBM3E products and starting up mass production of HBM4 in the second half of the year. They also intend to expand supply of server DDR5 products and lead industry trends toward higher density with their 128 gigabyte and 256 gigabyte memory products. For NAND, they plan to actively address demand for high-density SSDs, including QLC, to reinforce their leading position in the server space.
- Analyst asked about the impact of Chinese suppliers on the Memory business and the company's response.
- The company has been focusing on the high-end market, ramping up advanced node processes, and scaling down legacy products like DDR4 and LPDDR4, while expanding the share of high value-added products. The company expects to dramatically scale down the share of DDR4 and LPDDR4 products, which accounted for low 30% of sales in 2024, to a single-digit share in 2025.
- The company has been focusing on the high-end market, ramping up advanced node processes, and scaling down legacy products like DDR4 and LPDDR4, while expanding the share of high value-added products. The company expects to dramatically scale down the share of DDR4 and LPDDR4 products, which accounted for low 30% of sales in 2024, to a single-digit share in 2025.
- Analyst asked about the display market, particularly paneled adoption, and the company's plans to meet the demand for new form factors and low power consumption.
- The company plans to establish a roadmap for low power consumption and advance technologies across backplane materials and electronics. They also plan to expand their low power panel structure to a wider range of products to drive demand for diverse form factors. The company aims to strengthen its leadership in the smartphone OLED market by continuously enhancing the product's durability and flatness, ensuring they establish their own differentiated technology.
- The company plans to establish a roadmap for low power consumption and advance technologies across backplane materials and electronics. They also plan to expand their low power panel structure to a wider range of products to drive demand for diverse form factors. The company aims to strengthen its leadership in the smartphone OLED market by continuously enhancing the product's durability and flatness, ensuring they establish their own differentiated technology.
- Analyst asked about the company's outlook on the smartphone market growth in 2025 and the company's sales guidance.
- The company expects market growth to be driven by the upper portion of the mass market segment due to the proliferation of AI functionality to mass market devices and improvements in hardware performance. The growth rate of the premium segment is expected to decelerate slightly compared to the previous year. The company aims to continue its flagship-centric growth through the launch of the S25 series in the first half, which features unprecedented performance in integrated AI platform and multimodal interaction. They also aim to enhance the form factor design and durability, while diversifying their lineup later this year to expand their customer base. Through these efforts, the company aims to achieve double-digit growth in flagship revenues in 2025.
- The company expects market growth to be driven by the upper portion of the mass market segment due to the proliferation of AI functionality to mass market devices and improvements in hardware performance. The growth rate of the premium segment is expected to decelerate slightly compared to the previous year. The company aims to continue its flagship-centric growth through the launch of the S25 series in the first half, which features unprecedented performance in integrated AI platform and multimodal interaction. They also aim to enhance the form factor design and durability, while diversifying their lineup later this year to expand their customer base. Through these efforts, the company aims to achieve double-digit growth in flagship revenues in 2025.
- Analyst asked about the competitive situation in the mass market segment, particularly regarding price wars and specs.
- The company aims to strengthen communication about their strengths, such as security and overall product competitiveness, mainly targeting emerging markets like the Middle East and Africa. They plan to expand their smartphone market share and firm up their
- The company aims to strengthen communication about their strengths, such as security and overall product competitiveness, mainly targeting emerging markets like the Middle East and Africa. They plan to expand their smartphone market share and firm up their
- Analyst asked about Samsung's strategy for robotics-related projects, including humanoid robots.
- Samsung is developing advanced, multi-purpose, intelligent robots with the goal of addressing societal challenges, transforming everyday life, and creating new growth opportunities. The company is focusing on manufacturing, services, and home application applications. Samsung has incorporated Rainbow Robotics as a subsidiary to strengthen the foundation for advanced robot technology. The company is accelerating the development of intelligent humanoids by combining robotics expertise with AI and software technologies. The Future Robotics Office has been established under direct CEO oversight, led by Jun-Ho Oh, a founding member of Rainbow Robotics, and supported by Samsung's diverse robotics talent. The company is strengthening its capabilities through in-house development, strategic investments, and partnerships with leading global robotics companies to ensure continuous advancement.
- Samsung is developing advanced, multi-purpose, intelligent robots with the goal of addressing societal challenges, transforming everyday life, and creating new growth opportunities. The company is focusing on manufacturing, services, and home application applications. Samsung has incorporated Rainbow Robotics as a subsidiary to strengthen the foundation for advanced robot technology. The company is accelerating the development of intelligent humanoids by combining robotics expertise with AI and software technologies. The Future Robotics Office has been established under direct CEO oversight, led by Jun-Ho Oh, a founding member of Rainbow Robotics, and supported by Samsung's diverse robotics talent. The company is strengthening its capabilities through in-house development, strategic investments, and partnerships with leading global robotics companies to ensure continuous advancement.
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