Samsung Electronics posted 640 billion Won (~RM 2.13 billion) in operating profit in Q1 2023 which is a sharp 95% reduction compared to the 14.12 trillion Won (~RM46.96 billion) recorded in the same quarter last year. This makes it the lowest quarterly profit recorded by Samsung Electronics in 14 years. In the same period, the recorded income was 63.7 trillion Won which is an 18% decrease compared to the same quarter of 2022.
This reduction was due to the chip business which recorded a loss of 4.58 trillion Won. The lack of demand for chips due to post-pandemic normalization as well as product dumping is the cause of business losses that have been generating a large amount of income for Samsung. The good news for them is that the mobile phone business recorded a profit of 3.94 trillion won (~RM 13.1 billion) which is higher than the same quarter of 2022.
Although the global chip market is currently unstable causing prices to plunge by up to 70%, Samsung has made a model expenditure of 10.7 trillion Won into their chip business last quarter to further increase capacity which is expected to recover after H1 2023.
As we previously reported, South Korea has passed their own chip act to make them the center of the world's chip production. The demand for semiconductors will continue to increase in the near future and South Korea will become the center of its production in the world so as not to fall behind Taiwan and the United States.