Samsung reports record loss in Q1 2023, cutting chip output

Today, Samsung officially published the provisional results for the first quarter of 2023 with sales of 63 trillion won and an operating profit of 0.6 trillion won on a consolidated basis. Due to the global economic downturn and reduced chip demand, Samsung reported a 14-year record loss in Q1 2023.

Samsung revealed that the performance (loss) of Q1 2023 with sales decreased by 10.59 percent and operating profit by 86.08 percent compared to the previous quarter, and sales decreased by 19 percent and operating profit by 95.75 percent compared to the same period last year.

Samsung Q1 2023 Earnings Guidance

• Consolidated Sales: Approximately 63 trillion Korean won
• Consolidated Operating Profit: Approximately 0.6 trillion Korean won

Do note that the above estimates are based on K-IFRS. The Korean disclosure regulations don’t allow earnings estimates to be offered as a range. In order to follow such regulations, the above figures represent the median of the estimate ranges provided below.

• Sales: 62 ~ 64 trillion Korean won
• Operating Profit: 0.5 ~ 0.7 trillion Korean won

Cutting chip production

The South Korean tech titan reportedly said that memory demand had dropped sharply because of a weak global economy and customers slowing purchases as they focused on using up their stocks. To get rid of further losses, it’s cutting chip production.

“We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured.”

Since the company will be trimming the chip production, it didn’t reveal the size of the planned production cut, but it sent a strong signal. It could have a tough decision for Samsung as it recently said that there will be small adjustments like pauses for refurbishing production lines but not a full-blown cut.