Samsung just reported a record US$1.6 billion loss in its heretofore bread-and-butter semiconductor division. It made just US$455 million in operating profit this past quarter, a whopping 96% slump compared to Q1 of last year when it was riding high on chip demand, after the COVID-19 pandemic brought on unprecedented supply chain challenges.
Before the chip division, it used to be Samsung’s smartphone business that raked in the big bucks, and it would now have to take its old role to keep Samsung profitable while the memory demand situation improves.
Needless to say, the main culprit is Samsung’s excellent Galaxy S23 Ultra which not only carries the best Qualcomm mobile processor to date – custom Snapdragon 8 Gen 2 for Galaxy – but is also equipped with a brand new 200MP main camera.
Samsung’s shocking earnings guidance may thus result in an official quarterly results announcement where the mobile division is one of the few bright spots in its business operations, something that hasn’t happened since the early Galaxy line days.
It would rather be introducing temporary production cuts in the semiconductor division in order to decrease supply and normalize demand which is expected to rebound later in the year. In the summer, it is expected to announce a completely overhauled set of foldable phones in its clamshell and book lines, which should bring additional profit contribution from its mobile department.
