Today's Edition
SEOUL (AFP)
The operating profit of South Korean tech giant Samsung Electronics sank almost a third in the fourth quarter owing to spending on research, the company said Friday, as analysts said it was struggling to meet demand for chips used in AI servers.
The news comes as industry leaders try to assess the outlook for the sector after Chinese startup DeepSeek unveiled a groundbreaking chatbot that performed as well as artificial intelligence pacesetters -- apparently for a fraction of the cost.
The world's largest memory-chip maker had already acknowledged in October that it was facing a "crisis", and acknowledged questions had arisen about its "fundamental technological competitiveness and the future of the company".
It said operating profit fell to 6.5 trillion won ($4.5 billion) in October-December, from 9.18 trillion won in the previous three months. However, it was up 130 per cent on-year.
Sales rose 11.8 per cent to 75.78 trillion won and net profit rose 22.2 per cent to 7.75 trillion won on-year, topping forecasts according to Yonhap News Agency.
The firm said the fourth-quarter fall-off was down to "soft market conditions, especially for IT products, and an increase in expenditures including R&D", as well as the "initial ramp-up costs to secure production capacity for cutting-edge nodes".
It warned that in the first three months of 2025 "overall earnings improvement may be limited due to weakness in the semiconductors business".
