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Samsung reports 95 percent profit drop in the first quarter 2023
Samsung today announced first quarter 2023 earnings results, confirming a huge 95 percent operating profit decline. Earlier, the company published a document estimating a sharp drop in profit, which is now detailed in the final results, blaming the chip business.
The South Korean tech giant disclosed that its operating profit fell to 640 billion won ($478.6 million) for the first quarter, down 95 percent from last year’s 14.12 trillion won and the lowest profit for any quarter in 14 years. Its revenue dropped 18 percent to 63.7 trillion won.
Samsung’s chip division reported a 4.58 trillion won loss compared to a 8.45 trillion won profit a year earlier.
Samsung First Quarter 2023 Profit & Results
DS Division: Sales KRW 13.73 trillion, operating profit -4.58 trillion
In the case of memory semiconductors, demand for DRAM was sluggish due to high inventories at customers such as servers. In the case of NAND flash, despite weak server and storage demand, bit growth exceeded market expectations by actively responding to the demand for high-density products.
System LSI’s performance declined as demand for major products such as SoC (System on Chip), sensor, and DDI (Display Driver IC) decreased sharply due to sluggish demand in major applications such as mobile and TV.
The foundry’s earnings declined as demand contracted due to the global economic downturn and orders decreased due to increased inventories of customers.
Device eXperience Division: Sales KRW 46.22 trillion, operating profit KRW 4.21 trillion
Despite the negative growth in the market, MX (Mobile eXperience) saw an increase in sales QoQ and a profit rate of more than double digits thanks to strong sales of the Galaxy S23 series.
In addition, thanks to process operation efficiency, the operating profit of the flagship, A series, tablet greatly improved, contributing to the performance.
Network sales declined mainly in major overseas markets such as North America and Southwest Asia.
VD’s profitability improved both quarter-on-quarter and year-on-year by focusing on premium TV sales and reducing operating costs amid contracting TV market demand due to the off-season and global economic downturn.
Household appliances recorded earnings at the same level as the previous quarter due to sluggish demand and continued cost burden.
SDC: Sales KRW 6.61 trillion, operating profit KRW 0.78 trillion
Although earnings declined due to a contraction in the market for small and medium-sized panels, it maintained its market leadership in the premium market thanks to the expansion of foldable models and strong sales of flagships. In the case of large panels, losses eased with the launch of new QD-OLED products.
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Samsung remained the king in the Q2 2024 market, but Apple and Xiaomi are getting closer. IDC market research data shows that Samsung led the worldwide smartphone market in the second quarter of the year and Chinese brands scored rapid growth.
According to IDC, Samsung sold 53.9 million devices in the second quarter. The company occupied an 18.9% market share internationally. The company has slightly improved its sales share up from 53.5 million units in the same period last year.
The data suggests that Apple ranked second in terms of global volume sales. The iPhone maker shipped 45.2 million devices in Q2, 2024. It captured a market share of 15.8%, a modest increase from 44.5 million shipments in the second quarter of last year.
Third comes Xiaomi. The Chinese brand saw massive growth in sales year over year. It had sold 42.3 million smartphones in the second quarter alone. It’s a big jump from 33.2 million units shipped in Q2 2023, becoming a potential threat to Apple and Samsung.
Apart from this, Vivo also recorded significant growth in the global market. The company’s year-over-year growth in Q2 was 21.9%, with sales listing 25.9 million units with a market share of 9.1%. The growth percentage shows that aggressive marketing and boasting competitive specs into devices is paying off.
Samsung, Apple’s game isn’t over…
Last week, Samsung launched its new foldable phones, releasing on July 24, 2024. Apple, on the other hand, is expected to launch new flagship iPhones in September. It means, Samsung will enjoy the third quarter as well. The fourth quarter might be of Apple as iPhone sales would sharply grow in the global market given the new lineup release.
Samsung is now preparing to unveil new FE products later this year, followed by the S25 series in early next year. Chinese brands are expected to debut their latest flagships in the last quarter of this year, while Google Pixel phones are also coming in August.
Samsung today announced provisional sales and profit results for the second quarter. Samsung formally announced the provisional/predicted sales and operating profit, suggesting a massive profit boom in Q2, 2024 given the AI memory semiconductor rise.
In Q2, 2024, Samsung sales provisionally increased by 2.89% and operating profit by 57.34% compared to the previous quarter thanks to AI boom. Besides, the sales climbed by 23.31% and operating profit by 1,452.24% compared to the same period last year.
The company expects sales of 74 trillion won and operating profit of 10.4 trillion won on a consolidated basis. While these results are not final, there won’t be much change in the final result when it comes out. Samsung had a pretty profitable period in the second quarter.
Samsung in Q2
- Consolidated Sales: Approximately 74 trillion Korean won
- Consolidated Operating Profit: Approximately 10.4 trillion Korean won
The Korean tech giant is currently facing yield issues in its second-generation 3nm process. The flagship Exynos processor is unlikely to be commercialized this year. It would lead the Mobile business to face additional burdens due to rising prices of Snapdragon chipsets.
Meanwhile, Samsung is focussing on HBM (high bandwidth memory) semiconductors. HBM is a key player in artificial intelligence servers and data centers. The booming AI market will directly benefit Samsung’s semiconductor business.
Samsung ranked first in market share in the global smartphone market in Q3, 2023. TrendForce report says that Samsung led the global Q3 smartphone market, recording a market share of 19.5%.
Overall production in the third quarter increased by 11.5% compared to the previous quarter to 60.1 million units. During the same period, Apple’s production increased by 17.9% to 49.5 million, thanks to iPhone 15.
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Third place was taken by Xiaomi (13.9%), followed by Oppo (12.6%) and Transion (8.6%). 6th place is Vivo (8%). Meanwhile, global smartphone production reached 308 million units, a 13% increase compared to the previous quarter and a 6.4% increase from the previous year.
Huawei’s re-entry into the flagship smartphone market targeting Apple has had a significant impact in China. Huawei is aiming to expand its high-end flagship series, focusing on the Chinese domestic market next year, so Apple “We plan to attack directly”.
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