Samsung pushing to improve its TV and smartphone earnings

With the chip business sliding down, Samsung is reportedly looking to improve its earnings from smartphone and TV businesses. According to the Korean media, the company’s control tower has ordered the two business units to find ways to make more money in the coming months. An early launch of the Galaxy Z Fold 5 and Galaxy Z Flip 5 could be a result of this.

Samsung wants its TV and smartphone units to contribute more to its earnings

Samsung posted its lowest quarterly profit in several years this past quarter. The Korean behemoth took home just KRW 640 billion (roughly $483 million) in the first three months of 2023. In comparison, it made KRW 14.12 trillion (more than $10 billion) in the same period last year. The latest figure marks a year-on-year drop of 96 percent in its profit, which doesn’t bode well for any global company.

This massive decline is due to a slowdown in the semiconductor industry. Chip prices have fallen steeply over the past few months. And, since Samsung usually made more than half of its quarterly profit from chip sales, it couldn’t avoid this slump. To put things into perspective, the Korean behemoth made KRW 8.45 trillion from chips in Q1 2022 (almost 60% of the total profit that quarter). But, in Q1 2023, it ended up losing KRW 4.58 trillion.

This is the company’s first loss from the chip business in 14 years. Worst yet, the outlook for the coming months isn’t any better. Samsung doesn’t see its semiconductor division massively overturning this deficit anytime soon. As such, it wants other business units to contribute more to its profits. Most notably, the Korean behemoth is looking at its TV and smartphone business divisions.

According to The Elec, Samsung’s Business Support Task Force, which is the control tower of the conglomerate, has ordered these units to work out strategies that help make more money in the coming quarters. In response to that call, the smartphone unit is reportedly considering launching the Galaxy Z Fold 5 and Galaxy Z Flip 5 about 2-3 weeks earlier than usual. A late July launch of the duo will allow it to improve its earnings in the third quarter (July-September).

But for Samsung’s TV business, it’s all looking very gloomy. It posted lower earnings than compatriot and rival LG in the first quarter and reportedly has no weapon ready to propel business growth in the second quarter. To make matters worse, LCD prices are increasing even though consumer spending on electronics remains low. It remains to be seen if Samsung manages to improve its earnings in the coming quarters.