• Revenue: KRW75.8 trillion, a decline of 4% quarter on quarter.
• Annual Revenue: KRW300.9 trillion, second highest ever.
• SG&A Expenses: KRW22 trillion, up KRW1.2 trillion quarter on quarter.
• Operating Profit: KRW6.5 trillion, down KRW2.7 trillion quarter on quarter.
• Operating Margin: 8.6%, decreased by 3 percentage points.
• Currency Impact: Positive impact of KRW0.7 trillion due to currency movements.
• CapEx Q4 2024: KRW17.8 trillion, with KRW15 trillion in DS division.
• Annual CapEx 2024: KRW53.6 trillion, up from KRW53.1 trillion in 2023.
• Free Cash Flow: KRW19.9 trillion.
• Shareholder Return Pool: KRW9.9 trillion, 50% of free cash flow.
• Dividend: KRW363 per common stock, KRW364 per preferred stock.
• Share Repurchase Program: KRW10 trillion announced, KRW3 trillion repurchased.
• Smartphone ASP: $260.

• Warning! GuruFocus has detected 4 Warning Signs with XBUL:SSUN.

Release Date: January 31, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Samsung Electronics Co Ltd (XBUL:SSUN) achieved a record high fourth-quarter revenue in the memory segment, driven by increased sales of high-value-added memory products.
• The company announced a share repurchase program valued at KRW10 trillion to enhance shareholder value, with a significant portion already repurchased.
• Samsung Electronics Co Ltd (XBUL:SSUN) is focusing on expanding its high-value product portfolio, including HBM, DDR5, and LPDDR5x, to strengthen its market competitiveness.
• The company is advancing its technology leadership in AI and semiconductor processes, with plans to ramp up production of 2-nanometer technology.
• Samsung Electronics Co Ltd (XBUL:SSUN) is committed to sustainability, incorporating recycled materials in its products and launching initiatives like the Galaxy Trade-In program.

Negative Points

• Samsung Electronics Co Ltd (XBUL:SSUN) experienced a 4% decline in overall revenue quarter-on-quarter, attributed to softer market conditions and increased competition.
• Operating profit decreased by KRW2.7 trillion quarter-on-quarter due to increased R&D expenses and weaker IT product markets.
• The company's semiconductor business is facing ongoing weakness, with expectations of limited performance improvement in the first quarter of 2025.
• The display segment is experiencing conservative performance outlooks due to weak smartphone demand and rising competition.
• Samsung Electronics Co Ltd (XBUL:SSUN) anticipates continued macroeconomic uncertainties and geopolitical risks, which could impact its business operations and market conditions.

Q & A Highlights

Q: Can you share details on the execution plan for the remaining KRW7 trillion of the share repurchase program announced in November 2024? Also, could you provide more details on DRAM and NAND bit growth, ASP, and operating profit? A: We plan to repurchase KRW10 trillion worth of shares over 12 months. Details such as timing and method will be shared soon. For the memory business, DRAM bit growth was down by low teens percentage Q-on-Q, and DRAM ASP rose by around 20% Q-on-Q. Despite weak demand, high value-added products increased as a share of total sales, leading to a substantial increase in ASP versus the third quarter.

Q: Could you provide an update on your HBM3E business and your next-gen product development roadmap beyond HBM3E? A: Our HBM3E products are in mass production, with sales exceeding HBM3. We plan to start mass production of optimized products in late Q1 2025, with full ramp-up in Q2. We are also developing HBM4, targeting mass production in the second half of 2025, and have shipped samples of HBM3E 16-stack products for validation.

Q: How does Samsung view policy risk from the Trump administration's agenda, and what are the planned countermeasures? A: We acknowledge potential impacts from the Trump administration's policies. Samsung closely monitors geopolitical developments and will leverage our global production capabilities and advanced supply chain management to respond to potential changes. We aim to turn challenges into opportunities.

Q: Could you update us on the 2-nanometer process in the Foundry business? A: Samsung's 2-nano platform is under development, optimized for mobile and HPC applications. We released the first version of our process design kits to customers in the first half of 2024, targeting mass production in 2025. We are in talks with Tier 1 customers across diverse applications and leveraging our competitive GA process.

Q: What are your strategies to enhance competitiveness in the on-device AI market following the launch of S25? A: We enhanced NPE performance by optimizing the latest AP and increasing DRAM bandwidth. Galaxy AI now offers a more comprehensive and integrated experience, capable of understanding user context and preferences. We aim to enable intuitive interactions and continue enhancing Galaxy AI as a personal agent.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.