Shortly after Samsung announced a bevy of products, the Korean giant posted its earnings report for the Q2 2023 period, and just like the previous quarter, the profit drop is massive here. Where the company announced a 96 percent drop in profit in the previous quarter, in this one, it has stated that it experienced a 95 percent drop, and that is due to weak demand for memory chips.

Samsung generated revenue of 60.01 trillion Korean won, or around $47.21 billion; latest figures trail analysts' expectations

In addition to the massive operating profit drop, which stands at 0.67 trillion Korean won, or 0.527 billion USD, Samsung also reported a 22 percent drop in sales, but it believes that demand for DRAM chips that are necessary for artificial intelligence resulted in increased shipments in the second quarter. While Samsung’s investors will certainly not be pleased with the results, the company claims global demand is expected to recover in the year’s second half.

“Global demand is expected to gradually recover in the second half of the year which should lead to an improvement in earnings driven by the component business. However, continued macroeconomic risks could prove to be a challenge in such recovery in demand.

The memory business saw results improve from the previous quarter as its focus on high bandwidth memory (HBM) and DDR5 products in anticipation of robust demand for AI applications led to higher-than-guided DRAM shipments.”

When talking about smartphone sales, CNBC reports that global shipments are said to decrease 3.2 percent in 2023 to 1.17 billion units, and though the Galaxy S23 family brings numerous improvements to the table, demand for these handsets simply is not present. Even with Samsung having announced the new Galaxy Z Fold 5 and Galaxy Z Flip 5, the company should not expect these two launches to drive any favorable outcome, although it should be mentioned that the foldable smartphone market is said to witness a shipments increase.

Also, from what we have heard about the Galaxy S24 series so far, these might only introduce iterative updates next year, meaning that we should not expect the next flagship lineup to contribute massively to Samsung’s financials in the coming quarters.

News Source: Samsung