A Samsung Galaxy Z Fold 5 smartphone, left, a Galaxy Z Flip 5 smartphone through the Galaxy Unpacked occasion in Seoul, South Korea, on Wednesday, July 26, 2023. Samsung launched the fifth era of its foldable smartphones on Wednesday, searching for to counter a sluggish marketplace for units and upcoming rival merchandise from Apple Inc.
SeongJoon Cho | Bloomberg | Getty Photographs
Samsung Electronics posted a second-quarter revenue drop Thursday as weak demand for reminiscence chips persists.
Listed here are Samsung’s second-quarter outcomes versus estimates:
Income: 60.01 trillion Korean gained (about $47.21 billion), vs. 60.8 trillion Korean gained anticipated by analysts, based on Refinitiv consensus estimates.Working revenue: 0.67 trillion Korean gained, vs. 0.6 trillion Korean gained anticipated by the corporate.
Samsung reported gross sales slipped 22% from a yr in the past, whereas working revenue plunged 95%. Earlier this month, Samsung estimated second-quarter income to be 60 trillion Korean gained and working revenue to be 600 billion Korean gained.
Samsung is the world’s largest maker of dynamic random-access reminiscence chips, that are present in shopper units comparable to smartphones and computer systems.
“World demand is anticipated to regularly get well within the second half of the yr which ought to result in an enchancment in earnings pushed by the element enterprise,” Samsung stated in its earnings report.
“Nevertheless, continued macroeconomic dangers might show to be a problem in such restoration in demand,” stated the South Korean agency.
Give attention to higher-end merchandise
Samsung stated that strong synthetic intelligence demand led to extra DRAM shipments than anticipated within the second quarter, in contrast with the primary quarter.
“The reminiscence enterprise noticed outcomes enhance from the earlier quarter as its give attention to excessive bandwidth reminiscence (HBM) and DDR5 merchandise in anticipation of strong demand for AI purposes led to higher-than-guided DRAM shipments,” stated Samsung.
Each DRAM and NAND flash reminiscence chips additionally noticed “extra restricted value drops” which improved second-quarter efficiency, in contrast with the primary quarter, Samsung stated.
“As server clients continued stock adjustment, general buy demand had not but recovered. Because of the sturdy demand for generative AI, nevertheless, funding from the info middle sector was focused on AI servers,” stated Samsung.
Excessive-performance reminiscence chips are required to coach generative AI fashions comparable to ChatGPT. Such chips allow generative AI fashions to recollect particulars from previous conversations and person preferences with a purpose to generate humanlike responses.
“Trying to the second half of the yr, the market is anticipated to regularly transfer towards stability contemplating growing manufacturing cuts within the trade, whereas stock changes by clients are prone to wind down,” stated Samsung.
Samsung stated it would give attention to high-value-added merchandise comparable to DDR5, LPDDR5x and HBM because it expects a restoration in demand, in addition to improve investments in infrastructure, R&D and packaging know-how.
Weak electronics demand
World shipments of smartphones are anticipated to say no 3.2% in 2023 to 1.17 billion models, based on world market intelligence agency Worldwide Knowledge Company. The agency lowered its forecast from February, pushed by elements comparable to “a weaker financial outlook” and “ongoing inflation.”
Smartphone and PC producers are grappling with extra inventories of reminiscence chips after stockpiling to fulfill elevated demand for shopper units through the pandemic. Inflation has led to customers chopping again on purchases of those items, driving down costs for reminiscence chips.
“Our conversations with channels, provide chain companions, and main OEMs all level to restoration being pushed additional out and a weaker second half of the yr,” stated Nabila Popal, IDC’s analysis director.
“Client demand is recovering a lot slower than anticipated in all areas, together with China.”
That is breaking information. Please verify again for updates.