Samsung Electronics Co missed analyst estimates for the past quarter, and warned that profitability would likely decline this quarter, citing weakness in its memorychip business and challenges with currency fluctuations.
South Korea’s biggest company reported net income of 6.45 trillion won (US$5.8 billion) last quarter, missing the 7.3 trillion won average of estimates compiled by Bloomberg.
Samsung, the world’s largest maker of memory chips and displays, struck a cautious tone that stood in contrast to that of many technology companies benefiting during COVID-19 lockdowns.
Photo: AFP
“In the first quarter, we expect overall profitability to decline due to relative weakness in the memory and display businesses,” Samsung executive vice president of investor relations Ben Suh said during a call with investors.
In the memory business, Samsung’s most important profit engine, “results are likely to weaken due to currency effects and continued costs associated with new fab ramp-up.”
Operating profit for the semiconductor unit was 3.85 trillion won in the fourth quarter, short of the 4.62 trillion estimate from analysts. The company said it expects a recovery in the business in the first half of this year.
In the smartphone business, Samsung struggled in last month’s Christmas holiday period, as Apple introduced its first 5G-capable iPhones and Chinese rivals put up fierce competition.
Investors had hoped that Samsung could increase its dividend payout substantially, in part because the founding Lee family faces an enormous inheritance tax bill.
Instead, the company said it would continue to return 50 percent of free cash flow to shareholders from this year through 2023, although its annual dividend payout would increase slightly to 9.8 trillion won.
The company signaled that it would continue to press ahead with critical deals and investments. Samsung would use its capital to expand the capacity of its foundry business, which manufactures chips for clients like Nvidia Corp, to meet demand and overcome current supply shortages.
It would also invest in facility expansions and “meaningful” acquisitions, the company said.
“For the last few years, we have been evaluating possible M&A [merger-and-acquisition] opportunities very carefully and have made significant progress in terms of preparation,” Samsung chief financial officer Choi Yoon-ho said during the earnings call. “Although it is difficult to pinpoint a specific timing due to uncertainties in the internal and external business environment ... we are optimistic of carrying out meaningful M&A activities during this term.”
Samsung has a fab in Austin, Texas, which is capable of operating a 14-nanometer process.
With rising growth expectations in the foundry market, Samsung is considering building a cutting-edge logic chipmaking plant in the region that would be capable of fabricating chips on a process as advanced as 3 nanometer, Bloomberg News reported earlier.
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
ADVERSARIES: The new list includes 11 entities in China and one in Taiwan, which is a local branch of Chinese cloud computing firm Inspur Group The US added dozens of entities to a trade blacklist on Tuesday, the US Department of Commerce said, in part to disrupt Beijing’s artificial intelligence (AI) and advanced computing capabilities. The action affects 80 entities from countries including China, the United Arab Emirates and Iran, with the commerce department citing their “activities contrary to US national security and foreign policy.” Those added to the “entity list” are restricted from obtaining US items and technologies without government authorization. “We will not allow adversaries to exploit American technology to bolster their own militaries and threaten American lives,” US Secretary of Commerce Howard Lutnick said. The entities
Minister of Finance Chuang Tsui-yun (莊翠雲) yesterday told lawmakers that she “would not speculate,” but a “response plan” has been prepared in case Taiwan is targeted by US President Donald Trump’s reciprocal tariffs, which are to be announced on Wednesday next week. The Trump administration, including US Secretary of the Treasury Scott Bessent, has said that much of the proposed reciprocal tariffs would focus on the 15 countries that have the highest trade surpluses with the US. Bessent has referred to those countries as the “dirty 15,” but has not named them. Last year, Taiwan’s US$73.9 billion trade surplus with the US
RSS