Samsung Electronics Co., Ltd. – World's Leading Technology Group

Brief Summary for Investors: Samsung Electronics is a diversified global technology giant with core businesses in semiconductors, smartphones, and consumer electronics. Recent performance has been significantly impacted by the volatility of the semiconductor market.

Development The historical share price performance has been largely driven by cyclical demand in the semiconductor business. Record profits in 2021 and 2022 (EPS: KRW 5,777 / KRW 8,057) were driven by a global chip shortage and high memory prices. The significant decline in profits in 2023 (EPS: KRW 2,131) reflects the subsequent market correction, excess inventories, and lower demand. The quarterly data for 2024/Q1 2025 show initial signs of recovery with rising revenues and a renewed increase in free cash flow, indicating an ongoing revival of the semiconductor cycle.

Opportunities:

• Revival of the semiconductor market: Rising demand for high-performance chips for AI servers and applications on end devices (AI PCs, AI smartphones) offers significant growth potential.
• Leading technology role: Strong market position in the development of advanced memory chips (e.g., HBM) and manufacturing technologies (e.g., 2nm GAA).
• Diversified portfolio: The consumer durables and display business offers stability during downcycles in the semiconductor business.

Risks:

• High cyclicality: The core business remains vulnerable to the sharp ups and downs of the semiconductor market.
• Geopolitical tensions: Global supply chain concentration and trade conflicts, particularly in Asia, pose an operational risk.
• Intense competition: Strong pressure from competitors in all core segments (e.g., TSMC in the foundry, Apple in the premium smartphone market).

Additional notes: The balance sheet metrics are robust (leverage ratio < 0.3, high liquidity), which gives the company financial flexibility to invest in promising technologies and to manage market downturns.

Conclusion: Samsung Electronics is a financially healthy industry leader on the cusp of the next upswing in the semiconductor cycle. Its short- to medium-term performance will primarily depend on the speed and strength of the recovery in chip demand and the company's ability to translate its technology leadership into profitable growth. The inherent cyclicality of its business model remains the largest investment risk.

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