Samsung’s earnings are down 95 p.c for a second consecutive quarter

A South Korean flag, left, and Samsung Electronics Co. flag fly outside the company's headquarters in Seoul, South Korea.

Enlarge / A South Korean flag, left, and Samsung Electronics Co. flag fly outdoors the corporate’s headquarters in Seoul, South Korea. (credit score: Jean Chung/Bloomberg by way of Getty Photographs)

Issues are nonetheless dangerous at Samsung. After the corporate’s Q1 2023 noticed a crushing 95 p.c year-over-year revenue drop, Q2 2023 is not any higher, with the corporate posting KRW 0.67 trillion ($524.9 million) in earnings, one other big 95 p.c drop from the KRW 14.1 trillion ($10.7 billion) it made in Q2 2022.

Samsung is usually identified for its electronics and home equipment, however on the earnings sheet, Samsung is a reminiscence firm. Estimates of the corporate’s revenue construction in additional regular occasions (2022) places reminiscence (NAND and RAM) at 55 p.c of earnings, with cell at 22 p.c, and shows at 11. Samsung’s LSI division—that is the foundry and Exynos chips—is at 6.9 p.c, and different shopper electronics, for all of the shelf area they take up, solely make up four p.c of earnings.

Whereas back-to-back 95 p.c revenue declines are undoubtedly dangerous, Samsung anticipated this. The corporate is dealing with down a glut of unsold chips, resulting in decrease costs and decrease earnings. Reminiscence corporations stockpiled chips through the pandemic, and whereas some corporations anticipated the increase occasions to finish and minimize manufacturing in November 2022, Samsung waited till April 2023, resulting in its huge pile of unsold stock. Together with its earnings report, Samsung introduced it’s chopping reminiscence manufacturing once more to attempt to get its stock beneath management. Whereas Samsung’s different divisions meant the corporate turned a small revenue within the first half of 2023, the reminiscence division contributed an working lack of $7 billion for the 12 months up to now.

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