Samsung profits and revenue slump, hard, as predicted • The Register

Samsung Electronics has posted nasty This autumn outcomes and steered that premium merchandise and a surging foundry enterprise are its means out of a hunch.

The chaebol reported its lowest quarterly working revenue since 2014: ₩4.3 trillion ($3.4 billion). The 69 p.c year-on-year drop was accompanied by an eight p.c year-on-year drop in income to ₩70.5 trillion ($57.3 billion).

The disagreeable numbers weren’t surprising. In early January, Samsung released steering and preliminary figures that warned buyers to count on lower than stellar outcomes.

Samsung’s outcomes report makes a number of mentions of “stock changes” – a well mannered means of claiming financial situations imply its prospects plan to construct much less stuff utilizing Samsung elements.

Server-makers are amongst these making such changes.

“For DRAM, demand for server was restricted as Set construct declined due to financial uncertainty and prospects’ stance on stock discount remained. Cell and PC demand was weak due to main prospects’ continued stock changes and Set construct discount. However the Firm expanded the portion of cutting-edge nodes by optimizing its product portfolio and actively responded to the demand for high-density merchandise specializing in main datacenters and server OEM prospects,” defined Samsung. “For NAND, demand for server SSD was considerably stagnant due to prospects’ stock changes.”

“In 2023, primarily based on price competitiveness, the Reminiscence Enterprise plans to increase the proportion of high-value-added merchandise by addressing the demand for high-density server SSDs, reply to the high-density development of smartphones and PC and strengthen its market management,” predicted Samsung.

Cell panels additionally predictably fell as international demand for smartphones fell to lows not seen in a decade.

The Foundry Enterprise bucked the downward development and posted a brand new document for quarterly income. The chaebol didn’t disclose a exact determine, however did attribute it to the growth of superior node capability and a diversification of shoppers and purposes.

The corporate announced [PDF] it is going to improve foundry orders in 2023 for the 3nm 2nd technology GAA course of and give attention to the event of the next-gen 2nm course of whereas diversifying into automotive chips.

The 3nm first-generation course of is at the moment being mass-produced with a steady yield, Samsung acknowledged, including that the 3nm second-generation course of is “progressing quickly.”

The chaebol additionally stated it had began creating 4nm for automotive, and its automotive system-on-chip (SoC) enterprise had “solidified its mid- to long-term development base” by supplying scheduled samples to a European premium OEM, and securing an MOU for autonomous driving merchandise within the US.

Samsung’s not a serious SoC participant, so these wins are important.

Going premium seemed to be Samsung’s resolution to lots of its woes. For semiconductors, the corporate stated it could give attention to “the demand for high-end merchandise, reminiscent of DDR5, LPDDR5x and 200 megapixel (MP) picture sensors amid a weak reminiscence market and gentle international IT demand.”

The tech kraken additionally stated it could cater to the premium section when it got here to smartphones with the launch of Galaxy S23, digital home equipment by means of its BESPOKE Infinite Line, in its Gadget eXperience (DX) Division and reminiscence too.

The struggling big continues to spend money on the enterprise section. Out of ₩53.1 trillion ($56.7 billion) capital expenditure in 2022, ₩47.9 trillion (51.1 billion) went to semiconductors.

Massive panels “narrowed” its losses as QD-OLEDs elevated and LCD stock was depleted.

Capital expenditure on reminiscence in 2022 was targeting P3 and P4 infrastructure to organize for mid- to long-term bit provide and excessive ultraviolet (EUV) know-how. Its foundry investments have been targeted on Pyeongtaek superior node manufacturing capability and creating the infrastructure of a model new Taylor, Texas facility.

Whereas This autumn was a nasty one for Samsung Electronics, its full yr delivered a document ₩302.23 trillion ($245 billion) income and ₩43 trillion revenue ($35.3 billion). ®