Samsung has released its financial report for the first quarter of 2023 and, as the guide warned, profits have plummeted to levels not seen in the last 15 years.
Operating profit between January and March fell 18% year over year, while profit dropped from KRW 14.12 trillion to KRW 0.64 trillion, a staggering 95% decline.
Samsung expects global demand to rebound in the second half of the year which would help its recovery.
The mobile experience division responsible for smartphones and smart devices was the least affected in this uninspiring quarter. Sales were down 2% year over year but up 22% quarter on quarter. The networking business that is part of the same division took a slight hit due to weakness in key overseas markets like North America and Southwest Asia, but operating profit actually increased both quarterly and year-over-year.
The increase in quarterly sales can be attributed to the launch of the new premium smartphone models: the Galaxy S23 series, with the S23 Ultra particularly strong. In addition, efforts have been made to improve operational efficiency.
The company confirmed that the decline in its memory and semiconductor business was due to weak demand and inventory adjustments from customers. The display business also failed to impress as the mobile panel market contracted, while the large panel business trimmed losses slightly. The impact was also negative, especially in the components business, due to the strength of the Korean won against the US dollar.
Current market trends are expected to continue into the following quarter, which ends in June. The DS division will focus on enhancing the gate-all-around (GAA)-based 2nm process while meeting the demand for DDR, LPDDR5X and other high-end products. Cost efficiency will be another driving force for the Korean manufacturer in the second quarter, which is expected to improve profitability in both the short and long term.
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