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Samsung’s Q4 Earnings Miss Expectations Amid Mounting Chip Challenges

by THEFUTURE.TEAM

January 11, 2025

Samsung Electronics reported a disappointing preliminary operating profit for the fourth quarter of 2024, falling significantly short of market estimates. The South Korean tech giant’s struggles to ramp up advanced chip production for Nvidia, coupled with sluggish demand for traditional memory chips, took a toll on its earnings.

The company expects an operating profit of 6.5 trillion won ($4.5 billion) for the quarter, well below analysts’ SmartEstimate of 7.7 trillion won. While the figure represents a 131% increase compared to the same period last year, it is a sharp 29% drop from the prior quarter. Preliminary revenue came in at 75 trillion won, slightly under expectations.

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Chip Woes Weigh Heavily

Samsung’s focus on manufacturing high-bandwidth memory (HBM) chips for Nvidia’s artificial intelligence GPUs has proven costly. Nvidia CEO Jensen Huang recently acknowledged the company’s efforts, stating that Samsung needs to “engineer a new design” to meet Nvidia’s requirements, but he expressed confidence in their progress.

Rising research and development expenses and underutilised factory capacities in the logic chip division further dragged profits. Analysts estimate losses in this segment may have widened to $1.5 billion during the quarter, up from $960 million in Q3.

Market Rivalry Intensifies

As Samsung struggled, rival SK Hynix—Nvidia’s main HBM chip supplier—reported strong performance and record earnings, with its stock surging 23% last year. Samsung’s own shares dropped 32% over the same period, significantly underperforming South Korea’s broader market.

Despite these challenges, some analysts believe Samsung’s chip business may have reached its lowest point. “There are concerns about Samsung’s major businesses continuing to lose competitiveness. But chip demand may have bottomed out,” said Lee Min-hee of BNK Investment & Securities.

Device Business Under Pressure

Samsung’s devices division, which includes smartphones, TVs, and appliances, also saw earnings decline due to slower demand and rising competition. Sales of premium foldable smartphones were particularly disappointing.

The division’s struggles were compounded by the South Korean won’s depreciation to a 15-year low, driven by domestic political instability and global trade tensions. While a weaker won typically boosts overseas revenue, it wasn’t enough to offset waning demand.

Looking Ahead

Despite the challenges, Samsung ended the trading session 3.4% higher, as investors viewed the weak results as already priced into the stock. With detailed Q4 results expected on January 31, analysts will be closely watching for updates on Samsung’s progress in advanced chip manufacturing and recovery in its mobile and device businesses.

The tech giant faces a pivotal moment as it navigates intensifying competition, rising costs, and shifting market dynamics in the global semiconductor industry.

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Only 1% Of Cyprus Farms Use Precision Farming Technologies

Cyprus remains one of the European Union’s least digitised agricultural economies, with just 1% of farms using precision farming technologies in 2023, according to Eurostat.

The findings come as the EU continues to encourage the adoption of digital tools aimed at improving agricultural productivity, efficiency and sustainability.

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Internet Access Expands, But Digital Uptake Lags

Internet access has improved across the bloc, although adoption remains uneven. Eurostat found that 43% of EU farms had internet access in 2023, with northern and central European countries leading the way.

Denmark, Germany, Slovakia, Latvia, the Czech Republic and Austria all reported internet access rates above 90%.

Greater connectivity, however, has not translated into widespread digital adoption. Farm management information systems, which help farmers manage day-to-day operations, were used by only about 11% of EU farms. France was a notable exception, with around 60% of farms using the technology.

Precision Farming Concentrated In Larger Operations

Robotics adoption also remained relatively limited, with only about 7% of EU farms using robotic technologies. Overall, around 18% of farms with utilised agricultural area employed at least one precision farming technology or practice in 2023.

These included robotics for plant protection, band spraying, variable-rate application, precision crop monitoring and soil analysis. Despite representing fewer than one in five farms, these holdings accounted for around 44% of the EU’s utilised agricultural area.

The figures suggest that precision farming remains concentrated among larger agricultural businesses, where investment in digital technologies is typically easier to support.

Cyprus Lags Behind EU Leaders

Luxembourg, Finland and Estonia recorded the highest shares of utilised agricultural area managed by farms using precision farming technologies, each exceeding 75%.

At the other end of the ranking, Cyprus recorded just 1%, while Greece and Romania reported between 10% and 15%. The results indicate that Cyprus remains at an early stage of digital adoption in agriculture, even as precision farming becomes more widespread across parts of the European Union.