According to BusinessKorea’s latest report on July 12, sources in the foundry industry have disclosed that Samsung Electronics’ semiconductor foundry department, which includes the system LSI department, is projected to achieve sales of 4.437 trillion won (0.283 Trillion INR) in the second quarter (April-June).
The operating loss is expected to reach 710 billion won (currently about 45.3 Billion INR). Comparing to the same period last year, Samsung’s semiconductor foundry business revenue was 6.892 trillion won (currently about 439.81 billion INR), and operating profit was 608 billion won (currently about 38 billion INR).
This indicates that in the second quarter of this year, the business revenue of this division will decline by 35.6% year-on-year, and the profit will turn from profit to loss.
Furthermore, the division lost 299 billion won in the first quarter (currently about 19 Billion INR), which implies that in the first half of this year, the department has accumulated losses of more than 1 trillion won (currently about 63.72 Billion INR).
Experts stated that the decline in Samsung’s semiconductor foundry business is mostly due to the slow revival of the smartphone industry.
Since overall demand for smartphones has been sluggish, business clients have been surprisingly slow to consume parts inventories, particularly as they are decreasing orders for image sensors and display driver integrated circuits.
This decrease in customer orders resulted in a drop in sales of the system LSI division.
Additionally, the foundry division also faced increased cost burdens due to lower production line utilization. Samsung was the first company to achieve mass production of 3nm chips before, and its 3nm ultra-micro-manufacturing process has also begun to be reflected in the company’s second-quarter results.
However, this has not impeded the company’s deficit from widening, as the economic downturn and high production costs have made it challenging to attract customers.
As previously announced on July 7, Samsung’s Q2 operating profit was 600 billion won (currently about 38.23 Billion INR), a YoY decrease of 95.7%.
The semiconductor foundry division’s losses in Q1 and Q2 have accumulated to over 1 trillion won (currently about 63.72 Billion INR).
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