Samsung's Q2 profit drops 95% as chip downturn continues
Solid performance from its mobile business allowed Samsung to save face and the company expects the chip market to stabilize in the second half of the year.
Samsung's operating profit nosedived in the second quarter from the heavy losses incurred by its chip division but solid performances from its other businesses allowed the company to remain profitable.
The South Korean tech giant said it recorded 60 trillion won in revenue and 0.67 trillion won in operating profit, a drop of 22% and 95%, respectively, from a year ago.
Samsung's chip division, or Device Solutions Division, recorded a steep operating loss of 4.36 trillion won, though it was an improvement from the previous quarter.
The narrower loss came from the company's focus on high-end products such as HBM and DDR5 memory chips that are in high demand for AI applications.
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Overall purchases remained low during the quarter, however, and Samsung is expecting a gradual recovery of the market during the second half of the year.
On the other hand, Samsung's consumer electronics division, called Device Experience Division by the company, recorded high profitability from higher sales of premium TVs and digital appliances, the company said.
The Mobile Experience Business, which is part of the consumer electronics division, recorded an operating profit of 3 trillion won.
The effect of launching the Galaxy S23 Series faded in the second quarter but for the first half of the year in total, they performed better than their predecessors from a year ago, Samsung noted.
For the remainder of the year, the company is expecting growth from last year, especially in the premium sector, which will be buoyed by Samsung's focus on the recently launched Galaxy Z Flip 5 and Galaxy Z Fold 5.
Despite the poor earnings, the company's spending during the quarter stood at 14.5 trillion won, which mostly went to upgrading its chip factories.
Samsung Display also chipped in a meaningful 0.84 trillion won in operating profit from the demand for its panels from smartphones.
The display panel business unit expects an improvement in earnings in the second half of the year from launches of flagship smartphones by customers, Samsung said.
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