Samsung’s financial report for Q1 2023 has revealed that the company’s profits have fallen to a level not seen in the past 15 years.
The report shows that the operating profit for January to March has decreased by 18% YoY, while yield has plummeted from KRW 14.12 trillion to KRW 0.64 trillion – a staggering drop of 95%.
The decline in profits is likely due to weak demand and inventory adjustments from customers in the memory and semiconductor business. The display business has also suffered as the market for mobile panels contracted.
However, the mobile experience division responsible for smartphones and smart devices was the least affected this quarter, with sales dropping only 2% YoY but increasing 22% every quarter. The division’s network business took a slight hit due to weakness in major overseas markets, but operating profit increased quarterly and yearly.
Samsung is hopeful that global demand will rebound in the second half of the year, which will assist in its recovery. The company has launched new premium smartphone models, such as the Galaxy S23 series, with the S23 Ultra performing particularly well to improve operational efficiency.
Additionally, they are trying to boost the gate-all-around (GAA) based 2nm process and meet the demand for high-end products such as DDR and LPDDR5X.
The Korean maker plans to focus on cost efficiency in Q2 to improve short- and long-term profitability. While current market trends will likely stagnate in the next quarter, Samsung hopes its efforts to improve operational efficiency will help them bounce back from this uninspiring quarter.
