According to the preliminary verification data disclosed by Samsung Electronics, calculated on the basis of consolidated financial statements, Samsung Electronics’ operating profit in the second quarter of this year was 668.5 billion won, a year-on-year decrease of 95.26%; sales were 60 trillion won, a year-on-year decrease of 22.28%; 925.01 billion won.
Samsung Electronics said the company reported consolidated revenue of 60.01 trillion won, down 6% from the previous month, mainly due to lower smartphone shipments. The DS (Device Solutions) segment saw a slight recovery in revenue, with operating profit rising to 0.67 trillion won quarter-on-quarter, while profitability improved in Samsung’s display and digital home appliance businesses.
In addition, the performance of the memory business improved from the previous quarter, as the business focused on high-bandwidth memory (HBM) and DDR5 products as DRAM shipments were higher than guidance in anticipation of strong demand for AI applications. System semiconductor margins declined due to lower utilization rates due to weaker demand in key applications.
In the mobile panel business, earnings were similar to the previous quarter due to stable sales of high-end panels, while the large panel business continued to focus on QD-OLED for the high-end market.
The Device Experience (DX) segment delivered strong profitability driven by higher sales of premium TVs and digital appliances, improved cost structure and improved operational efficiencies. Revenues from the network business declined in key overseas markets such as North America and Japan.
Samsung Electronics said that it expects global demand to gradually recover in the second half of the year, and the parts business will drive profit improvement. However, ongoing macroeconomic risks could pose challenges to demand recovery.
Samsung SDC’s mobile panel business is expected to see earnings improvement as major customers launch new smartphone models, expected to be Apple’s new iPhones, while the large panel business will meet year-end seasonal demand by supplying ultra-large panels.
Samsung Electronics’ total capital expenditure in the second quarter was 14.5 trillion won, of which semiconductor capital expenditure was 13.5 trillion won, showing a capital expenditure of 0.6 trillion won. Memory spending is mainly focused on completing the P3 infrastructure and P4 framework for mid-to-long-term supply. Foundry investments continued to focus on fabs in Tyler and Plains, Texas, to meet the demand for advanced nodes, while investments in displays focused on infrastructure and module production enhancements.
Samsung’s announcement also stated that thanks to the stability of the 3nm process, the foundry business is successfully mass-producing the third product using GAA technology, and the development of the second-generation 3nm GAA technology and 2nm GAA technology is on track and progressing smoothly.
In the handset business, sales in Samsung’s Mobile Experience (MX) business declined quarter-on-quarter as the impact of the Galaxy S23 launch faded in the first quarter. The recovery of the mass market has also been delayed due to the continued economic downturn, affecting sales in the second quarter, Samsung Electronics said. Despite this, the Galaxy S23 series achieved higher results than the previous generation in terms of sales and sales in the first half of the year. Supported by stable prices of key raw materials, the MX business strived to optimize operational efficiency across R&D, manufacturing and logistics, enabling it to maintain a double-digit profit margin. In the second half of 2023, the overall smartphone market is expected to return to year-on-year growth, especially in the high-end segment. However, external forecasts for market growth have also been revised down due to the risk of a prolonged global economic downturn.
