Samsung Electronics’ Device Solutions (DS) Division, responsible for the semiconductor business, achieved a turnaround to profit in just five quarters. After posting over 2 trillion won in losses in the previous quarter, the DS Division’s success in the first quarter of this year led to an improvement in the company’s overall operating profit and revenue.
According to Samsung’s announcement on April 30, the consolidated operating profit soared by 931.87% compared to the same period last year, reaching 6.61 trillion won. This figure surpassed the company’s total operating profit for the entire previous year, which stood at 6.57 trillion won. Furthermore, it exceeded analyst expectations by over 1 trillion won, surpassing their projected figure of 5.2 trillion won.
Revenue increased by 12.82% compared to the same period last year, reaching 71.92 trillion won. This marks the first time since the fourth quarter of 2023 that Samsung has regained revenue in the 70 trillion won range.
Samsung explained, “Memory Business returned to profit by addressing demand for high value-added products,” and added, “The Mobile eXperience (MX) Business posted higher earnings, and the Visual Display and Digital Appliances businesses also recorded increased profitability.”
The company attributed the positive impact on company-wide operating profit to the weakness of the Korean won against major currencies, which amounted to about 300 bilion won compared to the previous quarter.
Meanwhile, in the first quarter of this year, Samsung’s total capital expenditures amounted to 11.3 trillion won, an increase of 600 billion won compared to the same period last year. Of the total investment, 9.7 trillion won was focused on the semiconductor sector.
Samsung stated, “Spending on memory was focused on facilities and packaging technologies to address demand for High Bandwidth Memory (HBM), DDR5, and other advanced products,” and added, “Display investments were mainly made in IT OLED products and flexible display technologies.”
The DS Division recorded 23.14 trillion won in consolidated revenue and 1.91 trillion won in operating profit for the first quarter. Samsung mentioned that the Memory Business returned to profit by addressing demand across various sectors such as servers, storage, PC, and mobile, focusing on high-value-added products. They also anticipated a solid second quarter led by demand for generative AI.
However, the System LSI Business faced challenges with earnings improvements, mainly due to slowing panel demand affecting Display Driver IC2 (DDI) sales. The Foundry Business experienced a delay in sales improvement due to weak market demand and continued inventory adjustments. Samsung said, “Still, efficiency efforts in fab operations became more visible, which allowed it to narrow losses slightly.”
On the other hand, Samsung’s DX (Device eXperience) Division, responsible for mobile, TV, and home appliances, achieved an operating profit of 4 trillion won and revenue of 47.29 trillion won, driven by Galaxy smartphone demand. The MX Business within DX saw revenue and operating profit growth from strong sales of the Galaxy S24 series.
The Visual Display Business, responsible for TV, saw increased profitability compared to the previous quarter even as the overall market demand decreased. Samsung highlighted that this was achieved by concentrating on premium products, such as Neo QLEDs, OLEDs and TVs above 75″. However, profitability declined year-on-year due to stagnant TV market demand and increased costs amid intensifying market competition.
Samsung Display Corporation (SDC) achieved 5.39 trillion won in consolidated revenue and 0.34 trillion won in operating profit for the first quarter. Amidst intensified competition in the mobile OLED market, operating profit declined by more than half compared to the same period last year.
Samsung stated, “Despite decreased earnings in the mobile display sector due to heightened competition, SDC ensured timely supply of flexible displays for a major customer’s premium smartphones and enhanced utilization rates for rigid displays.” The company noted, “In the large display business, SDC managed to reduce losses through the introduction of new QD-OLED monitor products and an expanded customer base, despite ongoing demand constraints.”
