Samsung sees acute chip shortage persisting, warns of mobiles headwind after profit triples

Core Viewpoint - Samsung Electronics anticipates a worsening chip shortage in 2023 due to the AI boom, which is benefiting its memory chip business but creating challenges for its smartphone and display units [1][2]. Financial Performance - Samsung's operating profit more than tripled to a record high of 20 trillion won ($13.98 billion) in Q4, up from 6.49 trillion won a year earlier, driven by strong pricing power in the memory chip sector [2][3]. - Revenue rose 24% to 93.8 trillion won in the same quarter, with the chip business contributing over 80% of total profit, as operating profit surged 470% to 16.4 trillion won [4]. Market Dynamics - The company expects a significant shortage of memory products to persist, with limited supply expansion anticipated until 2026 and 2027, while AI-related demand remains robust [3]. - Memory prices are projected to increase further in the current quarter, potentially leading to surprise earnings, although this will intensify cost pressures on the mobile business [5]. Business Challenges - The mobile and display divisions face a "challenging year" due to rising memory prices, prompting the company to collaborate with partners to ensure stable product supply and enhance resource efficiencies [6]. - Samsung's co-CEO TM Roh described the current chip shortage as "unprecedented" and did not rule out the possibility of raising prices [7].