Samsung’s semiconductor business has been in trouble this year, 2023Q1 loss may exceed US$3 billion

Although Samsung had a promising start in 2023, with the release of its Galaxy S23 series smartphones garnering favorable reception, the company has encountered difficulties in the semiconductor sector. The latest report indicates that Samsung’s semiconductor business has fallen into a quagmire, losing 3 trillion Korean won (approximately $2.315 billion) in the first two months of 2023 alone.

To make matters worse, Samsung’s semiconductor business is expected to continue losing money in the first quarter of this year, with estimated losses skyrocketing to 4 trillion Korean won (approximately $3.087 billion). This is the first loss for Samsung’s semiconductor business since the fourth quarter of 2008, and the global economic downturn is the culprit.

According to industry insiders, although Samsung’s wafer foundry business in the semiconductor department is still profitable, its scale is insufficient to cover the enormous losses in the memory business. The Equipment Solutions (DS) department has lost at least 2 trillion Korean won (approximately $1.543 billion). The Equipment Solutions department has always been the main source of profit for Samsung’s semiconductor business, but the recent sharp decline in memory prices has dealt a heavy blow, while the declining demand for various products such as smartphones, consumer electronics, and displays has also dragged down revenue.

In 2022, Samsung Electronics’ total profit was 43.4 trillion Korean won (approximately $33.493 billion), with its semiconductor business contributing 23.8 trillion Korean won (approximately $18.367 billion). In order to continue providing funds for its semiconductor business, Samsung Electronics has borrowed 20 trillion Korean won (approximately $16 billion) from Samsung Display.