[NewsSpace=JeongYoung Kim]  Samsung Electronics announced on April 27 that it posted sales of KRW 63.7454 trillion and operating profit of KRW 6.402 billion in the first quarter of this year based on consolidated standards. 

The company's semiconductor division recorded a quarterly deficit for the first time in 14 years since the first quarter of 2009, when it was hit by the global financial crisis. The explanation given by Samsung Electronics was that the overall purchasing sentiment was weakened due to global economic uncertainty and a slowdown in the economy, resulting in a 9.5% decrease in sales from the previous quarter.

In terms of business sectors, the semiconductor (DS) division showed unprecedented underperformance, with a deficit. The first-quarter sales of the DS division amounted to KRW 13.73 trillion, down 48.9% from KRW 26.87 trillion in the same period last year. The division's operating loss in the first quarter was KRW 4.58 trillion, compared to an operating profit of KRW 8.45 trillion in the same quarter last year and an operating loss of KRW 2.7 trillion in the previous quarter.

The main reason for the deteriorating performance is said to be weak demand due to high customer inventory of DRAM servers and other products. On the other hand, despite a weak demand for servers and storage, NAND responded actively to demand for high-capacity products, surpassing market expectations in terms of bit growth.

The system LSI also recorded a decline in performance as demand for key products such as SoC (system on Chip), sensors, and DDI (Display Driver IC, display driving chip) declined due to weak demand in major applications such as mobile and TV.

Foundry also saw a decline in performance as demand contracted due to global economic slowdown, and orders decreased due to increased customer inventory.

The device experience (DX) division recorded sales of KRW 46.22 trillion and operating profit of KRW 4.21 trillion in the first quarter.

The mobile experience (MX) business, which is responsible for smartphones, offset the deficit in the semiconductor sector and achieved excellent results with the effect of selling Galaxy S23, with a profit margin of more than two digits.

In addition, flagship, A-series, and tablet operations all contributed significantly to performance improvement through process optimization.

Network sales declined, with a focus on major overseas markets such as North America and Western Europe.

In the video display (VD) sector, profitability improved from the previous quarter and the same period last year, with a focus on sales of premium TVs and cost reduction, despite a contraction in demand in the TV market due to off-seasons and global economic slowdown. Similarly, consumer electronics continued to suffer from weak demand and cost burden, posting the same level of performance as the previous quarter.

Samsung Display reported sales of KRW 6.61 trillion and an operating profit of KRW 780 billion in the first quarter of this year. While the performance of small and medium-sized panels declined due to market contraction, Samsung maintained its market leadership in the premium segment with the expansion of foldable models and strong sales of flagship models. The large panel segment saw its losses eased with the launch of QD-OLED new products.

Samsung Electronics invested KRW 10.7 trillion in facilities in the first quarter, with semiconductor recording KRW 9.8 trillion and display around KRW 300 billion. In memory, the investment was focused on securing mid- to long-term supply through the completion of Pyeongtaek 3 and investments in advanced processes, as well as continued R&D and post-processing investments for future competitiveness. In foundry, investments were made in Texas and Pyeongtaek facilities to respond to demand for advanced processes, while in display, investments were focused on complementing small and medium-sized module and infrastructure.

Samsung Electronics expects the weak demand situation to continue in the second quarter, but remains positive about a gradual recovery in business as global demand recovers in the second half of 2023.

The DS division will continue its efforts to enhance its technological competitiveness with products for high-end demands such as DDR5 and LPDDR5x, as well as GAA (Gate-All-Around) 2nm. The DX division plans to pursue steady profitability through expanded sales of new models of smartphones and TVs, including foldable phones and Neo QLED, as well as efforts to improve market share through partner collaboration.

In addition, the MX division plans to strengthen its market leadership by introducing new foldable phone products with more differentiated and complete experiences. Samsung also plans to enhance its efforts to expand overall smartphone market share through strong sales of the Galaxy S23 series and customized sales programs for the A series.

The network division will continue to respond to major overseas businesses and pursue sales growth through new orders while strengthening its leadership in 5G core chips and vRAN (virtualized radio access network) technology.