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After sharing estimated figures earlier this month, Samsung has published its detailed earnings report for Q1 2023. The company suffered a steep decline in profit due to weak demand for semiconductors. The smartphone division saved its day riding on the success of the Galaxy S23 series.
Samsung suffered its first quarterly loss from semiconductors since 2008
Samsung posted a consolidated sales revenue of KRW 63.75 trillion (roughly $47.5 billion) in the first quarter of 2023. That’s down about 18% from KRW 77.78 trillion the company generated in the same period last year, which was its highest-ever revenue in the first three months of any year. While the latest figure isn’t too bad considering the current global economic condition, the Korean behemoth hardly took home any money in Q1 2023.
According to Samsung, its operating profit for the January-March 2023 period was just KRW 640 billion (roughly $477 million). The figure is down a staggering 96% from Q1 2022 when it made a profit of KRW 14.12 trillion. The massive decline in profit this year is due to poor financial performance from the semiconductor division.
The Korean behemoth has always made a large chunk of its profit from memory chips, a market it leads globally. But, the unit suffered a loss this time around amid an economic slowdown.
Overall, Samsung’s semiconductor division posted KRW 13.73 trillion in consolidated revenue in Q1 2023. That’s about half of the KRW 26.87 trillion it posted in the same period a year earlier.
However, while the company made a profit of KRW 8.45 trillion from the business last year (almost 60% of the total Q1 2022 profit), it ended up losing KRW 4.58 trillion this year. This is Samsung’s first-ever quarterly loss from the semiconductor business and the lowest quarterly profit since 2008 when the entire world suffered from an economic crisis.
The Galaxy S23 series helped Samsung stay on the positive side in Q1 2023
If not for the Galaxy S23 series, Samsung may have found it difficult to break even in Q1 2023. The company’s smartphone division posted an operating profit of KRW 3.94 trillion this past quarter, almost offsetting the losses of the semiconductor division. The display and digital appliances business brought home a few hundred million Won each to ensure the Korean behemoth stayed on the positive half of the earnings graph.
Going forward, Samsung doesn’t see the semiconductor business to make a sharp turnaround anytime soon. Reports are that the company is expecting its semiconductor profits to be halved this year. Since memory chips have been its cash cow in recent years, the Korean firm’s financial performance for the whole of 2023 could be pretty unsightly too.
It would be hoping the next-gen foldables to do well in the market. The Galaxy Z Fold 5 and Galaxy Z Flip 5 could debut in late July or early August. The Galaxy Watch 6 series should accompany the foldable duo.
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