Samsung Electronics faced a decline in revenue but achieved an increase in operating profit in the second quarter of 2023. The company showed a 6% decline in consolidated revenue to KRW 60.01 trillion ($46.8 billion) compared to the previous quarter. The decline was primarily attributed to lower smartphone shipments, although the DS (Device Solutions) Division’s revenue experienced a slight recovery. Despite the dip in revenue, the company’s operating profit increased to KRW 670 billion ($522 million), driven by improved performance in the DS Division, Samsung Display Corporation (SDC), and the Digital Appliances Business.
The Memory Business demonstrated positive growth in the second quarter, with a focus on high bandwidth memory (HBM) and DDR5 products, anticipating strong demand for AI applications. However, the System Semiconductors division faced challenges due to weak demand from major applications, resulting in a decline in profit.
SDC’s mobile panel business achieved consistent results compared to the previous quarter. In the large panel business, SDC enhanced its fundamentals with increased yield and productivity. It strengthened its position in the premium market with QD-OLED products, particularly ultra-large 77-inch TVs. Looking ahead, SDC expects improved earnings in the mobile panel business as major customers prepare to launch new smartphone models. The large panel business will focus on boosting sales of ultra-large TVs, which have been performing well. Furthermore, Samsung believes SDC’s acquisition of eMagin positions the company to lead a growing extended reality (XR) display market.
The Visual Display Business posted higher results year-on-year by focusing on sales of high-value-added products like Neo QLED, OLED, and ultra-large TVs while reducing overall costs. Although TV demand declined due to seasonal trends, the decrease eased compared to the previous year. In the second half of 2023, the Visual Display Business expects seasonal strength to mitigate the decline in overall TV demand, especially in the premium market, which is projected to remain robust. The company plans to leverage marketing strategies that emphasize areas it believes are highly valued by consumers, such as the environment, security, and content.
Samsung’s Mobile eXperience (MX) and Networks businesses achieved consolidated revenue of KRW 25.55 trillion ($32.89 billion) in the second quarter, with an operating profit of KRW 3.04 trillion ($3.04 billion). Overall market demand declined from the previous quarter due to macroeconomic factors such as high interest rates and inflation. Sales for the MX Business decreased sequentially, but the Galaxy S23 series performed well, achieving higher results in both volume and value compared to its predecessor. The MX Business maintained a double-digit margin through operational efficiency optimization and stabilized prices of major raw materials.
Looking forward to the second half of 2023, the overall smartphone market is expected to return to year-on-year growth, particularly in the premium segment. However, Samsung acknowledges that external forecasts for market growth have been lowered due to risks of a prolonged global economic downturn. To maintain its leadership in the global foldable smartphone market, the MX Business will focus on newly launched Galaxy Z Flip 5 and Galaxy Z Fold 5 series. Samsung also plans to enhance sales for the Galaxy S23 and Galaxy A series through strategic collaborations and region-specific sales programs. Additionally, the MX Business will boost sales of tablets and wearables, with a strong focus on new high-end models showcased at the recent Galaxy Unpacked event. Samsung aims to grow annual revenue in 2023 while securing solid double-digit profitability through operational efficiency enhancements.
