News
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.
Samsung restructures DRAM (memory) business to tackle intensifying Chinese memory chip surge. The company is reportedly revisiting its strategy amid growing competition from Chinese memory chipmakers and contract manufacturers.
Chosun reports that Samsung facing significant competition in the DRAM business. Chinese vendors aggressively enter the areas that are unaffected by the US sanctions. The company had to rethink its strategy to combat the Chinese surge surge.
Samsung’s DS Division head is tackling these challenges. The division is preparing for a potential workforce and organizational restructuring by the year-end. DS Division could scale back production of legacy DRAM and 8-inch foundry segment.
It’s worth noting that Chinese chip makers eyeing gains in areas such as legacy chips used in automobiles, aircraft, home appliances, and consumer electronics. The Q3 performance had taken a hit from weaker-than-expected memory chip demand.
Apart from this, Samsung Foundry is also adjusting course by reassigning workers from the 8-inch foundry line at its production facility in Giheung, Gyeonggi, where utilization rates have also been significantly lowered.
At the recent earnings call, Samsung acknowledged its profitability has taken a hit due to the influx of Chinese DRAM. South Korea’s SK Hynix has also indirectly mentioned the pressures posed by increased Chinese DRAM supply.
At AI Forum 2024, Samsung discussed the future of AI with global experts. The company held this year’s AI Forum on November 4 and 5. The event was graced by the presence of world-renowned AI scholars and Computer Engineering experts.
Speakers:
- Professor Yoshua Bengio from the University of Montreal in Canada
- Yann LeCun, Meta’s Chief AI Scientist and Professor at New York University in the US
- Ian Horrocks, Professor at Oxford University in the UK
[Nov. 4] Sustainable Innovation with AI and Semiconductors
On November 4, Samsung’s AI Forum focused on “Sustainable Innovation with AI and Semiconductors.” Experts, including Prof. Bengio and LeCun, highlighted AI safety, LLM limitations, and advancements in semiconductor tech.
[Nov. 5] Device AI for Our Daily Lives
On the second day of Samsung’s AI Forum, AI scholars and experts discussed “Device AI for Our Daily Lives.” Key topics included knowledge graphs, AI for science, and techniques to improve large language models efficiently.
AI is changing our lives at a remarkable speed. There’s a need to responsibly use artificial intelligence as it becomes more powerful. Samsung reiterated its commitment to build a more efficient and sustainable AI ecosystem.
Samsung Galaxy S25 may disappoint you in terms of RAM configuration. The company is allegedly considering an awful downgrade for the next vanilla flagship. A wild rumor indicates 8GB RAM on the base variant, which will be terrible in 2025.
According to Jukanlosreve, Samsung may introduce the Galaxy S25 with 8GB RAM. The Plus and Ultra models could get 12GB RAM, while the Ultra gets 16GB in 1TB of storage. The decision is seemingly under consideration due to the low DRAM yield.
If Galaxy S25 comes with 8GB RAM, it would match the iPhone 16 but lag behind the Pixel 9. Notably, Apple Intelligence requires 8GB of RAM, settling a long-due RAM upgrade on base iPhone models this year.
Google also boosted RAM configuration, given the increased load of AI processing. While the rumor hints at 8GB RAM in the standard Galaxy S25, things may change as the leaker himself is unsure of the RAM-related input.
Galaxy S20, Galaxy S21, Galaxy S22, Galaxy S23 and Galaxy S24 feature 8GB RAM. Samsung brought up to 12GB RAM on select mid-range models. 12GB RAM as standard is a long-standing demand of Samsung’s smartphone users.
The next-gen flagships will be powered by Snapdragon 8 Elite and Gemini Nano AI models. The chipset can be optimized to perform well on 8GB RAM. However, Gemini Nano may not be able to deliver maximum performance without enough RAM.
Virtual RAM is just a gimmick. It has nothing to do with the phone’s performance or functional smoothness. The feature description itself reveals that apps will make use of virtual RAM to perform better for a reliable multitasking experience.
Samsung may change its plans regarding the RAM on the flagship model. Larger RAM is a requirement nowadays and the company must stay ahead of its key rivals, which are either matching or having an edge in key areas.