Samsung Electronics hinted at a sustained recovery in memory chips and tech demand in 2024, despite a 34 percent year-over-year decline in fourth-quarter profit.

The world's biggest maker of memory chips said it expected mobile and PC makers to place more and better chips in devices as the use of artificial intelligence expands. Replacing older servers would also aid a gradual recovery in demand.

"In 2024, the memory business expects the market to continue to recover despite various potential obstacles, including interest rate policies and geopolitical issues," Samsung says.

The company's operating profit fell to 2.8 trillion won ($2.11 billion) in October-December, compared to 4.3 trillion won a year earlier.

In 2023, its chip business posted a record loss of 14.9 trillion won, down from a 23.8 trillion won profit a year earlier. This was due to an unprecedented downturn caused by weak demand for silicon gadgets.

In the business that has historically been Samsung's cash cow; fourth-quarter losses were less than any other quarterly loss in 2023.

In the fourth quarter, losses in the chip business shrank to 2.18 trillion won, compared to a 3.75 trillion won loss in the third quarter.

Chinese PC and mobile makers replenished memory chips during the quarter, having exhausted their own stocks for so long.

Chip prices will improve this year, as clients will need to replenish and chip makers will continue to reduce legacy chip production, according to SK Hynix, a cross-town rival.

Samsung says its memory business would focus on cutting-edge chips and improve profitability by actively addressing demand for high bandwidth memory and server products related to generative AI this year.