A significant decline in chip revenue has hurt Samsung's profits significantly, but the company is now expecting a return to form, on the back of increased demand for memory products for AI applications.
The company is now expecting its chip revenue this year to return to the 2022 level, which was before the downturn, and lead to high profits for the company. A return to those levels is needed for Samsung to significantly increase its profits again, something that shareholders have been pushing it to do.
Samsung's hoping for a return to form this year
This expectation was shared by Samsung co-CEO Kyung Kye-hyun during the company's annual shareholder meeting. Kye-hun heads Samsung's device solutions business, which is the chip division. He also said that Samsung was aiming to become the world's largest semiconductor company in the next two to three years.
The decline in memory chip demand and fall prices also significantly hurt Samsung, that has remained the world's largest memory chipmaker, even though the combined revenue for all of its semiconductor products still falls behind Intel.
Kye-hyun revealed that the memory business returned to the black in January and that it should be back to its winning ways starting this year. Address criticism on Samsung falling behind in the important high bandwidth memory segment to rivals like SK Hynix, he said that unfavorable market conditions were a factor in Samsung falling behind.
However, the company is now working hard to recover its competitiveness to create a robust business that's much more insulated from market conditions. Samsung's new HBM3E product has already receive high praise from customers like NVIDIA, and its also in talks with customers to provide advanced compute express links and processing in memory products.
