Samsung Profits Plunged 95% on Lagging Demand, Memory Price Erosion

The warning signs regarding Samsung's chip business have been readily apparent for quite some time, but the severity of the company's troubles was realized yesterday. Samsung revealed its earnings for the first quarter of 2023, and it wasn't pretty. The company said revenue came in at 63.75 trillion Korean won ($47.6 billion), which was down 18 percent compared to Q1 2022, but in line with Samsung's previous guidance. 

However, the South Korean chip and electronics giant said that operating profit during the quarter plummeted from KRW 14.12 million ($10.5 billion) during Q1 2022 to just KRW 640 billion ($476 million). To put that figure into perspective, Samsung hasn't reported an operating profit that low since Q1 2009.

Further compounding matters is that the oversupply has led to contract pricing for DRAM and NAND falling by as much as 24 percent and 16 percent, respectively, according to KB Securities. When you factor in that Samsung commands 45.1 percent of the DRAM market and 33.8 percent of the NAND market, the first quarter became a perfect storm of negativity for the company's financials resulting in a KRW 4.58 trillion ($3.4 billion) loss for its semiconductor business.

Samsung's LSI Business also fared poorly during the quarter, with the company noting that "earnings fell sharply in the first quarter due to a drop in demand for major products such as SOCs, sensors and DDIs." 

Brandon Hill

Brandon Hill is a senior editor at Tom's Hardware. He has written about PC and Mac tech since the late 1990s with bylines at AnandTech, DailyTech, and Hot Hardware. When he is not consuming copious amounts of tech news, he can be found enjoying the NC mountains or the beach with his wife and two sons.

  • InvalidError
    It would be nice if the current general-purpose memory slump caused Samsung to shift enough production to HBM3 to make it a viable mainstream alternative to GDDR6X/6W/7.
    Reply