Quarterly income of KRW 71.92 trillion, working revenue at KRW 6.61 trillion
International IT demand and enterprise surroundings anticipated to enhance in H2 primarily based on demand for AI purposes
Samsung Electronics at this time reported monetary outcomes for the primary quarter ended March 31, 2024.
The Firm posted KRW 71.92 trillion in consolidated income on the again of sturdy gross sales of flagship Galaxy S24 smartphones and better costs for reminiscence semiconductors. Working revenue elevated to KRW 6.61 trillion because the Reminiscence Enterprise returned to revenue by addressing demand for prime value-added merchandise. The Cell eXperience (MX) Enterprise posted larger earnings and the Visible Show and Digital Home equipment companies additionally recorded elevated profitability.
The weak spot of the Korean gained in opposition to main currencies resulted in a optimistic impression on company-wide working revenue of about KRW 0.3 trillion in comparison with the earlier quarter.
The Firm’s whole capital expenditures within the first quarter stood at KRW 11.3 trillion, together with KRW 9.7 trillion for the Gadget Options (DS) Division and KRW 1.1 trillion on Samsung Show Company (SDC). Spending on reminiscence was targeted on services and packaging applied sciences to deal with demand for Excessive Bandwidth Reminiscence (HBM), DDR5 and different superior merchandise, whereas foundry investments had been targeting establishing infrastructure to satisfy medium- to long-term demand. Show investments had been primarily made in IT OLED merchandise and versatile show applied sciences.
Reminiscence Enterprise Returns to Revenue; Second Quarter Anticipated to Stay Stable on AI Demand
The DS Division posted KRW 23.14 trillion in consolidated income and KRW 1.91 trillion in working revenue for the primary quarter.
For servers and storage, demand for generative AI confirmed strong developments, whereas demand for DDR5 and high-density SSDs remained sturdy. For PCs and cellular general, content-per-box continued to develop for each DRAM and NAND, and demand remained sturdy on the again of lively sell-in pushed primarily by Chinese language cellular OEM prospects.
The Reminiscence Enterprise returned to revenue because it achieved qualitative development by addressing the demand throughout servers, storage, PC and cellular, specializing in high-value-added merchandise reminiscent of HBM, DDR5, server SSDs and UFS 4.0., together with the rise in ASP.
Looking forward to the second quarter, the business is anticipated to stay strong, led primarily by demand for generative AI.
For servers and storage, the continual enhance within the provide of AI servers and subsequent enlargement of related cloud providers will enhance demand not just for HBM but additionally for typical servers and storage options. Demand for cellular is anticipated to be secure within the quarter, whereas PC prospects are predicted to be affected by gradual seasonality, making them prone to modify their inventories forward of recent product launches within the second half of the 12 months.
The Firm began mass manufacturing of HBM3E 8H this month and plans to mass produce HBM3E 12H merchandise and a 128GB product primarily based on 1b nanometer1 (nm) 32Gb DDR5 throughout the second quarter. The Firm additionally began mass manufacturing of V9 NAND for the primary time within the business this month.
Within the second half of 2024, enterprise situations are anticipated to stay optimistic with demand — primarily round generative AI — holding sturdy, regardless of continued volatility regarding macroeconomic developments and geopolitical points.
For HBM, the Firm will proceed to extend provide to be able to reply to rising demand for generative AI. In DRAM, the Firm plans to speed up 1b nanometer-based 32Gb DDR5 provide with sooner ramp-up speeds and additional strengthen its competitiveness within the high-density DDR5 module market. For NAND, the Firm plans to boost know-how management by mass producing quad-level cell (QLC) for V9 within the third quarter.
The System LSI Enterprise elevated the availability of methods on chips (SoCs) and sensors for main prospects’ new merchandise, however earnings enhancements have taken longer than anticipated as Show Driver IC2 (DDI) gross sales had been impacted by slowing panel demand.
With smartphone sell-out prone to present indicators of restoration after a gradual begin, the System LSI Enterprise will give attention to offering a secure provide of flagship SoCs and sensors and can be making ready to ship merchandise primarily based on superior applied sciences for brand spanking new wearables.
For cellular sensors, the utilization price is anticipated to stay excessive, together with the mass manufacturing of 50MP merchandise for world prospects. For DDIs, gross sales are anticipated to proceed increasing to satisfy demand from a significant buyer for brand spanking new IT/TV merchandise.
Amid a probable intensified strain for element pricing, the System LSI Enterprise will proactively modify its product combine to navigate these challenges successfully.
The Foundry Enterprise noticed a delay in gross sales enchancment as a consequence of weak market demand and continued stock changes. Nonetheless, effectivity efforts in fab operations turned extra seen, which allowed it to slim losses barely.
The event of superior 3nm and 2nm applied sciences is progressing easily, and 4nm know-how yields have stabilized. This enchancment in superior know-how competitiveness helped the Foundry Enterprise obtain its highest ever order backlog within the first quarter.
Amid a probable gradual restoration in market situations, second-quarter income is anticipated to rebound and attain double-digit quarter-on-quarter development after bottoming within the first quarter.
The Foundry Enterprise plans to finish the event of 2nm design infrastructure and put together 4nm know-how relevant to 3D IC. For mature applied sciences like 14nm and 8nm, it plans to arrange infrastructure for a number of purposes.
Within the second half of 2024, the foundry market is anticipated to see restricted development as uncertainties are prone to persist. Nevertheless, the Foundry Enterprise expects to outpace the market development price in annual gross sales because of elevated gross sales of modern applied sciences of 5nm and under. It would begin mass manufacturing of Gate-All-Round (GAA) 3nm second-generation know-how and enhance the maturity of 2nm know-how to give attention to high-growth purposes like AI and high-performance computing (HPC).
SDC To Concentrate on Versatile Shows and IT/Automotive, Goals for Gross sales Progress in Giant Panels
SDC posted KRW 5.39 trillion in consolidated income and KRW 0.34 trillion in working revenue for the primary quarter.
Within the cellular show enterprise, whereas intensifying competitors led to a decline in earnings from the earlier quarter, SDC ensured the well timed provide of versatile shows for a significant buyer’s high-end smartphones and improved the utilization price for inflexible shows.
For the massive show enterprise, SDC narrowed losses on the again of recent QD-OLED monitor merchandise and a stronger buyer base, regardless of an ongoing curb in demand.
Whereas SDC expects gross sales to extend in cellular shows with the launch of recent foldable telephones from a significant buyer and stronger demand for IT merchandise within the second quarter, earnings development is prone to be impacted by intensifying competitors.
As for big shows, SDC plans to deal with demand for TV panels for a significant buyer and seeks to develop gross sales of premium screens.
Within the second half of the 12 months, SDC will give attention to sustaining competitiveness by increasing the gross sales of versatile shows with low energy consumption and improved sturdiness whereas additionally persevering with to exchange LCD shows in smartphones with inflexible show merchandise. Moreover, SDC plans to spice up its IT and automotive companies to be able to diversify its enterprise portfolio.
SDC goals to extend giant show gross sales from the earlier 12 months by enhancing the manufacturing effectivity of QD-OLED shows and enhancing the product combine, specializing in high-valued-added choices.
MX Enterprise Posts Income Progress Amid Market Decline, Plans Continued Funding in AI
The MX and Networks companies posted KRW 33.53 trillion in consolidated income and KRW 3.51 trillion in working revenue for the primary quarter.
Market demand for premium and mid-range smartphone segments decreased sequentially in quantity and worth because the smartphone market entered the seasonally slower first quarter.
Nevertheless, the MX Enterprise achieved income and working revenue development as a consequence of sturdy gross sales of the Galaxy S24 sequence and maintained strong double-digit profitability via continued efforts in useful resource optimization. Particularly, Galaxy AI options on the S24, reminiscent of Circle to Search, continued to see excessive utilization charges and contributed to gross sales development.
Within the second quarter, general demand for smartphones is anticipated to say no sequentially as a consequence of seasonality. Accordingly, the MX Enterprise expects smartphone shipments to say no and pill shipments to stay constant sequentially.
The MX Enterprise will preserve its flagship-oriented gross sales strategy within the second quarter by making use of the Galaxy S24’s AI expertise to different flagship fashions and maximizing product competitiveness. Moreover, the MX Enterprise will goal to safe strong profitability by persevering with to streamline operations in gentle of continued geopolitical instability and sure will increase in the price of key parts. On the identical time, the MX Enterprise will stay dedicated to investing in R&D, together with in AI, regardless of a difficult surroundings.
Within the second half of the 12 months, the smartphone market is anticipated to rebound as a consequence of stabilizing shopper sentiment, the enlargement of AI services and financial development in rising markets.
The MX Enterprise will search annual development in smartphone gross sales and goals to take care of gross sales momentum via the enlargement of Galaxy AI to present and new flagship merchandise throughout foldable gadgets and tablets. For wearables, it’s going to strengthen the Galaxy ecosystem expertise via the enlargement of recent fashions and kind elements just like the Galaxy Ring. For smartwatches, the MX Enterprise will attempt to satisfy demand for upgrades via the launch of recent premium fashions.
Moreover, the MX Enterprise will proceed to hunt operational efficiencies to counter rising element prices to make sure strong annual profitability, and it’ll proceed to put money into analysis and growth to additional develop and refine Galaxy AI.
Visible Show and Digital Home equipment To Proceed Breaking New Floor within the AI Period
The Visible Show and Digital Home equipment companies posted KRW 13.48 trillion in consolidated income and KRW 0.53 trillion in working revenue within the first quarter.
The Visible Show Enterprise posted larger quarter-on-quarter profitability whilst the general market demand decreased by concentrating on premium merchandise, reminiscent of Neo QLEDs, OLEDs and TVs above 75″. Nevertheless, profitability declined year-on-year as a consequence of stagnant TV market demand and elevated prices amid intensifying market competitors.
Within the second quarter, general market demand is anticipated to stay weak as a consequence of declining TV demand in rising markets, however main world sporting occasions could result in alternatives to extend gross sales. The Visible Show Enterprise will give attention to securing profitability, enhancing gross sales of strategic merchandise and strengthening operations administration in every enterprise section.
Within the second half of 2024, general TV demand is anticipated to recuperate regularly amid an unsure macroeconomic and geopolitical surroundings. The Visible Show Enterprise will handle numerous shopper wants whereas selling “AI Display Management,” pushed by progressive premium TVs and Life-style screens. Moreover, it’s going to present differentiated buyer experiences via related gadgets and drive market development by selling superior options primarily based on safety and sustainability, in addition to boosting competitiveness in service companies reminiscent of Samsung TV Plus.
1 Refers to Samsung’s fifth-generation 10nm class DRAM.
2 Built-in circuit.
