Samsungs operating profit falls to a 14 year low but the
Hardware

Samsung’s operating profit falls to a 14-year low, but the company expects the market to recover in the second half of the year

The difficult situation of the largest manufacturer of memory chips, the South Korean company Samsung Electronics, can at least be seen from the most recent decision to significantly reduce production volumes. quarterly report showedSamsung’s operating profit fell 95% in three months of this year to its lowest level since 2009. Like SK hynix, this company expects the memory market to recover in the second half of the year.

    Image source: Samsung Electronics

Image source: Samsung Electronics

Samsung Electronics revenue fell 18% to $47.5 billion. Operating profit fell 95% year over year to $478.6 million, a 14-year low. Samsung’s net income was less than $1.05 billion. The semiconductor division as a whole made a loss of $3.4 billion, although it made $6.3 billion a year ago, but the revenue last year Quarter reached $10.2 billion Given the current low demand for devices with memory of this brand, earnings are unlikely to increase much.

Samsung Electronics management directly expressed hope for a gradual recovery in the smartphone and display market in the second half of the year, mainly due to the Chinese market. The introduction of more multi-core CPUs with DDR5 support should stimulate demand for RAM, company officials said.

In the semiconductor contract manufacturing segment, Samsung noted that first-generation 3nm products have reached a stable level of earnings, adding that second-generation 3nm products will be even more suitable for mass production. The development of the 2nm technology is proceeding according to plan. The company expects to succeed in the field of contract manufacturing of components for generative artificial intelligence systems as it is ready to offer customers a service of integrating eight-level HBM3 memory in 2.5D space packaging. In the second half of the year, demand for Samsung’s custom chip manufacturing services will recover, mainly driven by the high-performance computing segment and the automotive sector, company officials said.

The smartphone market will recover from the high-end segment in the second half of the year, according to Samsung forecasts, but demand for tablets and wearable electronics will remain at the same level. As early as the second quarter, demand in the lower and middle price segment will tend to recover and the smartphone market will continue to grow physically, but decline in value. In the last quarter, too, the premium segment of smartphones increased both in terms of unit numbers and money.

The company won’t significantly cut capital expenditures compared to last year to do so “Secure your medium and long-term competitiveness”. However, memory production volumes need to be reduced in the near future to curb the price drop. As can already be seen from the losses in Samsung’s core business, this trend leads to financial losses.

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Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

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