It's been a tough year for Samsung. The company has struggled to make its mark
in the lucrative high-bandwidth memory market. Its foundry has been forced to shut down some production lines after
racking up billions in losses. The memory business also faces intense competition from Chinese manufacturers.
The company has recently taken some major steps to try and turn things around, but that may not deliver immediate results. Analysts expect Samsung's operating profits to decline by as much as 40% in 2025.
Samsung needs to get in on the AI chip action
There are several challenges that Samsung Electronics will face in the coming year. Competition from Chinese chipmakers remains stiff and the domestic policy gridlock isn't helping matters. There's also the looming threat of tariffs from the incoming Trump administration.
Some market analysts in South Korea have
lowered Samsung's operating profit forecast for 2025 to 40.48 trillion won or around $30 billion. This is down by almost 40% compared to the $43.1 billion projection that was provided by analysts in August this year. Investors are feeling the doom and gloom. No wonder Samsung Electronics' stock has
recently hit a 4-year low.
Samsung recently
overhauled its semiconductor division leadership. It aims to better compete in the high-bandwidth memory segment, advance its competitiveness on next-generation nodes while also working hard to increase orders for legacy nodes. Despite that, the Chinese threat to its memory business still looms large.
Chinese memory makers are flooding the legacy DRAM market with their lower-priced products. Recent reports have revealed that they're
charging half the price that Samsung does for these DRAM chips. They're also expected to increase their production by 25% next year which may lead to future dumping in the market of lower priced alternatives to Samsung's DRAM products.
Samsung has to get in on the AI chip action by ensuring that its next-generation high-bandwidth memory products meet the requirement of companies like NVIDIA. That's remained elusive so far, but the company would be hoping that its renewed focus on the semiconductor division may help turn things around.
The post
Samsung may end up losing 40% of its profits next year appeared first on
SamMobile.
More...