Samsung is the world’s biggest maker of memory chips.
Jakub Porzycki | Nurphoto | Getty Images
Samsung Electronics on Tuesday said it expects to post a 35% drop in operating profit in the fourth quarter of 2023, missing expectations by a wide margin as a rebound in semiconductor prices likely narrowed losses in the South Korean company’s biggest profit-driving segment.
Samsung said that for the October-December quarter, operating profit is likely to be 2.8 trillion South Korean won ($2.13 billion), down 35% from the same period a year ago where the firm reported an operating profit of 4.31 trillion won. Operating profit was 2.43 trillion won in the previous quarter.
The profit guidance fell far short of LSEG’s SmartEstimate of 3.7 trillion won, which is weighted more heavily toward expectations of analysts who have been consistently more accurate.
Fourth-quarter revenue likely fell 4.9% from the same period a year ago to 67 trillion won, the firm said in a preliminary earnings statement.
Samsung is the world’s largest maker for dynamic random-access memory chips which are found in consumer devices such as smartphones and computers.
“[Samsung is] very good at making some of the best semiconductors in the world, at least in making them and getting them done. But their yields are so much worse than competitors like TSMC,” said Cory Johnson, chief market strategist at The Futurum Group, on Tuesday.
“… so bad yields can turn into really bad earnings results,” he told CNBC’s “Squawk Box Asia” after Samsung’s earnings preview.
Memory chip prices fell drastically last year, as a result of excess inventories post-Covid and weak demand for end products like smartphones and laptops.
“We estimate memory prices started to rebound from 4Q23, driven by production cuts by suppliers and a recovery in demand for mobile and PC,” said SK Kim, analyst at Daiwa Capital Markets, in a Jan. 4 report.
This has hit Samsung’s earnings hard. Samsung’s third quarter operating profit plunged 77.6% from a year ago, even though it came in better than expected. Operating profit in the second quarter slumped by 95% compared to the same period a year ago.
The demand for AI across all major applications will drive the overall semiconductor sales market to recover in 2024.
Galen Zeng
IDC
In late October, Samsung and SK Hynix – the world’s second-largest DRAM memory chip maker – signaled during their third quarter earnings calls that weak demand may have finally bottomed out following production cuts.
“We expect further price hikes in 1H24 and a marked rebound in earnings for memory makers in 2H24 and 2025,” said Kim of Daiwa Capital Markets, referring to the first and second half of this year.
“As such, we anticipate tailwinds for share prices in the near term.”
Memory chip prices have started increasing since the start of November, thanks to “memory manufacturers’ strict control of supply and output,” according to Galen Zeng, senior research manager of semiconductor research at IDC.
“The demand for AI across all major applications will drive the overall semiconductor sales market to recover in 2024,” said Zeng in a Dec. 21 report.
“The semiconductor supply chain, including design, manufacturing, packaging, and testing, will bid farewell to the downturn in 2023.”
The Amazon Prime logo is displayed on Amazon delivery trucks in Richmond, California, June 21, 2023.
Justin Sullivan | Getty Images
Department of Justice officials on Tuesday charged members or associates of an Armenian organized crime ring with stealing more than $83 million worth of cargo from Amazon by posing as legitimate truck drivers and siphoning off goods destined for the company’s warehouses.
Since at least 2021, at least four people linked to the crime ring carried out a scheme across California to steal truckloads of merchandise, ranging from smart TVs and GE icemakers to SharkNinja vacuums and air fryers, the DOJ alleged.
“At present, Amazon is plagued by recurring thefts of its shipments, which is commonly referred to as ‘cargo theft,'” the complaint says.
Amazon has ramped up its efforts to track and shut down fraudulent, deceptive and illegal activities on its sprawling online store. Eliminating stolen goods is particularly challenging. CNBC reported in 2023 that Amazon suspended dozens of third-party merchants it alleged were selling stolen goods, though many of those sellers claimed they were unknowingly caught in the scheme, putting their businesses at risk of survival.
Amazon isn’t the only retailer afflicted by cargo theft. Experts told CNBC cargo theft-related losses are estimated at close to $1 billion or more a year.
In its complaint, the DOJ said the alleged fraudsters operated four transport carriers — AK Transportation, NBA Holdings, Belman Transport and Markos Transportation — that would obtain contracted freight routes from Amazon Relay, an application used by truckers to obtain work, also referred to as loads.
Each trucker is assigned a load for pickup from a manufacturer’s warehouse to be dropped off at an Amazon facility. Instead, the groups would divert from their designated routes, take a portion of the goods off the trucks and resell them or gift them to associates, prosecutors allege.
In some cases, the “self-styled carriers” would complete their deliveries at an Amazon warehouse several days after they were expected to show up, according to the complaint.
DOJ officials seized the alleged fraudsters’ iPhones and found photos and videos of warehouses lined with boxes of crockpots, Keurig coffee machines, keratin shampoo, Weber grills and other goods.
Amazon teams cooperated with DOJ officials in their investigation, including sharing information about the stolen goods, and details of the alleged fraudsters’ accounts on its online marketplace.
Representatives from Amazon didn’t immediately respond to a request for comment.
DOJ officials linked the defendants to a litany of other alleged crimes, including attempted murder, kidnapping, illegal firearm possession and health-care fraud. Several of the 13 defendants are expected to appear in a Los Angeles district court on Tuesday and Wednesday, while one of the defendants appeared in a court in Fort Lauderdale, Florida, on Tuesday and was detained.
Thomas Fuller | SOPA Images | Lightrocket | Getty Images
Apple approved the Epic Games title Fortnite on Tuesday, returning the first-person shooter game to the App Store in the U.S., five years after its removal.
Fortnite was kicked off the App Store in 2020 after Epic updated its game over the web to take payments directly, instead of through Apple’s in-app payment mechanism, which takes fees up to 30%. The move angered Apple and kicked off a years-long legal battle.
Last month, Epic scored a victory in court, when a judge ruled that Apple wasn’t allowed to charge a commission when apps link out for payment, or dictate whether the links look like buttons. Epic said last week that it had submitted Fortnite to the U.S. App Store. To return, Fortnite had to pass App Review, Apple’s process in which new apps or updates are reviewed by Apple employees to ensure they work and adhere to the company’s guidelines.
Apple had dragged out its approval process for the app since May 9, when Epic submitted it to Apple. Last week, Epic filed a legal challenge, and on Monday, a judge said that Apple had to explain why Fortnite hadn’t been approved yet or come to a resolution with Epic over the game’s status.
Apple is appealing the latest court order, and looking to get a pause enabling it to roll back changes the company has already made to the App Store in response. An Apple representative didn’t immediately return a request for comment.
Last month’s ruling led major app makers such as Amazon and Spotify to change their apps to accommodate links to buy content. For example, users can now buy Kindle books inside the Kindle app on an iPhone.
Amazon and Spotify were able to update existing apps that had already been approved with changes enabled by last month’s order. After Epic sued Apple, the iPhone maker revoked Epic’s developer account in addition to booting Fortnite.
Epic was able to get a European developer account and now offers Fortnite in Europe through a third-party app store under the Digital Markets Act, which went into effect last year. IPhone users can also play Fortnite through cloud gaming services. But even in Europe, Apple tried to terminate Epic’s account before backing off, Epic said.
The fees that Apple takes from the App Store are an increasingly important part of Apple’s business. They’re reported in Apple’s Services business, which also includes advertising, AppleCare warranties, payments, and subscription offerings such as Apple TV+. Apple reported nearly $27 billion in services revenue during the March quarter.
A Waymo self-driving car, seen with a driver, stops at a red light outside the U.S. Capitol in Washington, D.C., on Friday, March 31, 2025.
Bill Clark | CQ-Roll Call, Inc. | Getty Images
Waymo co-CEO Tekedra Mawakana told CNBC on Tuesday that the Alphabet-owned ride-hailing company has reached 10 million trips, doubling in the past five months.
“These are all paid trips, and they represent people who are really integrating Waymo Driver into their everyday lives,” said Mawakana, speaking at the Google I/O developer conference. The 10 million figure includes rides in Austin, Los Angeles, San Francisco and the Phoenix area.
Waymo is delivering more than 250,000 paid robotaxi rides a week, Alphabet said in its April earnings report. On Monday, Waymo said it had won approval to expand its autonomous ride-hailing service to more parts of the San Francisco Bay Area, including San Jose.
The robotaxi company is part of Alphabet’s “Other Bets” unit. Revenue in the overall category fell 9% in the first quarter from a year earlier to $450 million, and operating loss grew from to $1.23 billion from $1.02 billion a year ago.
While those figures include a number of businesses, Mawakana confirmed that Waymo is not yet profitable but that the company is “super focused on building a sustainable business.”
“We’re proving out that it can be a profitable business,” she said. “There’s a path to profitability.”
Waymo faces potential competition from Tesla, which has promised to launch its robotaxi service in Austin next month. Tesla CEO Elon Musktold CNBC on Tuesday that the plan was still on track, and that the company will start with about 10 vehicles and rapidly expand to thousands if the debut goes well with no incidents.
Musk said Tesla aims to bring its robotaxis to Los Angeles and San Francisco following the planned Austin launch. He has previously claimed Tesla’s “generalized” approach to robotaxis is more ambitious than Waymo’s. Tesla primarily relies on camera-based systems and computer vision instead of using sophisticated sensors including lidar and radar in its vehicles.
Mawakana said that Waymo has taken what it views as the “safest path.”
“There’s probably a lot of ways it can be done, but we’re the only ones that have done it,” she said. “We’ve been doing it 24 hours a day for almost five years. And so to us, it’s really important to focus on safety, not focus on safety and then cost — not cost and then safety.”