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Samsung Electronics has forecast limited earnings growth for Q1 2025, citing weak conditions in the memory chip market and intensifying competition with rivals like Apple and SK Hynix. The South Korean tech giant reported a 29% drop in Q4 2024 operating profit to $4.48 billion.
The company expects memory market demand to recover in the second quarter but warned that expanding U.S. chip export controls could heighten volatility. Samsung has faced challenges meeting Nvidia's requirements for high-bandwidth memory (HBM) chips used in AI applications, allowing competitor SK Hynix to dominate the market.
Despite these setbacks, Samsung plans to maintain its capital spending on chips, which totaled 46.3 trillion won last year. Analysts note that the company's ability to produce advanced 12-layer HBM3E chips will be pivotal for its performance in 2025.
Samsung also aims to boost mobile phone margins above 10% this quarter as it competes with Apple in the AI-driven smartphone market. However, sluggish demand for traditional memory products and weak smartphone sales continue to weigh on the company's overall profitability.
Shares in Samsung fell 2.2% following the announcement, reflecting investor concerns over its ability to regain market leadership amid shifting industry dynamics.
