June 1, 2023

Samsung is the world’s largest reminiscence chip maker and the second-largest contract chip maker.


Samsung reported its lowest revenue in 14 years for the primary quarter this yr for the heavy loss incurred by its chip division.

The South Korean tech big stated on Thursday that it recorded 63.75 trillion received in income and 0.64 trillion received in working revenue for the quarter, a drop of 18% and 96%, respectively, from a yr in the past.

Samsung’s Machine Options Division, its chip division, reported a steep working lack of 4.58 trillion received. The corporate stated the efficiency of its reminiscence chip enterprise fell considerably from the earlier quarter because of the total lower in demand amid an financial slowdown and weakened buyer spending.

Different reminiscence chip corporations SK Hynix and Micron had additionally reported heavy losses for his or her newest fiscal quarters from this sluggish demand and oversupply of reminiscence chips. All three corporations have introduced that they’re planning to decrease their manufacturing output.

The slowdown in demand for DRAM, which has been constantly in excessive demand by server clients for years now, has been one of the important causes of the downturn. For the primary quarter, Samsung stated its bit development couldn’t meet its earlier steering, that means it produced much less DRAM than deliberate. Nonetheless, for NAND, the tech big stated it achieved its aim and extra as most merchandise have been shifting towards higher-density chips, permitting Samsung to promote extra premium merchandise.

Apart from reminiscence, Samsung’s logic chip companies additionally noticed weak demand within the quarter. Gross sales of SoCs, sensors and show chips all fell whereas demand for its contract chip manufacturing service, or foundry, additionally dropped.

Whereas the restoration in demand for chips within the subsequent quarter will likely be restricted, the market is predicted to steadily recuperate as buyer inventories normalize, Samsung stated.

In the meantime, Samsung’s Machine Expertise Division, its client electronics division, reported an working revenue of 4.21 trillion received. Out of this complete, the MX Enterprise, Samsung’s smartphone enterprise unit, contributed 3.94 trillion received, one in every of its strongest performances in recent times. Demand for premium smartphones was excessive through the quarter and the sturdy efficiency of Galaxy S23 Extremely allowed the enterprise unit to safe double-digit profitability, Samsung stated.

Samsung Show additionally contributed a good 0.78 trillion received, due to the excessive demand for foldable show panels from smartphone producers and its QD-OLED panels from TV makers. And regardless of the general poor efficiency for the primary quarter, Samsung spent 10.7 trillion received on its services, its highest spending determine for the quarter thus far. Of this complete, 9.8 trillion received was spent on its chip manufacturing services in preparation for future provides, the tech big stated.

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