By Joyce Lee and Heekyong Yang

SEOUL (Reuters) -Samsung Electronics flagged a continued restoration in reminiscence chips and tech demand in 2024, after reporting a 34% on-year drop in fourth-quarter revenue regardless of a reminiscence worth rebound, as client demand remained weak in lots of companies.

The world’s largest maker of reminiscence chips stated it anticipated cellular and PC makers to position extra and higher chips in units as use of synthetic intelligence expands, whereas the necessity to exchange older servers would additionally assist a gradual restoration in demand.

“In 2024, the reminiscence enterprise expects the market to proceed to get well regardless of numerous potential obstacles, together with rate of interest insurance policies and geopolitical points,” Samsung (KS:) stated in a press release.

Samsung stated working revenue fell to 2.8 trillion received ($2.11 billion) in October-December, versus 4.3 trillion received a yr earlier, and in step with the corporate’s personal estimate of two.8 trillion received flagged earlier this month.

For the total yr, its chip enterprise swung to a report lack of 14.9 trillion received in 2023 from a 23.8 trillion received revenue a yr earlier, hit by an unprecedented downturn attributable to weak demand for devices that use chips.

Nonetheless, fourth-quarter losses had been lower than each different quarterly loss in 2023 within the enterprise that has traditionally been Samsung’s money cow.

Losses within the chip enterprise shrank to 2.18 trillion received within the fourth quarter, versus a 3.75 trillion received loss within the third quarter, as reminiscence chip costs rebounded.

Chinese language PC and cellular makers started to restock reminiscence chips through the quarter, after utilizing up their very own shares for therefore lengthy.

Cross-town rival SK Hynix additionally stated final week chip costs would enhance this yr as shoppers would want to restock and producers would proceed to chop legacy chip manufacturing.

Samsung stated its reminiscence enterprise would concentrate on cutting-edge chips and enhance profitability by actively addressing demand for top bandwidth reminiscence (HBM) and server merchandise associated to generative AI this yr.

Samsung’s share worth fell 0.7% in morning commerce versus a flat benchmark index.

Its shares rose 42% in 2023 on expectations of improved reminiscence chip demand however have fallen about 5% year-to-date on profit-taking by native institutional buyers, analysts stated.

Fourth-quarter income fell 4% to 67.8 trillion received.

($1 = 1,328.5300 received)