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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