Samsung Electronics Could Record its First Quarterly Deficit in 14 Years
Samsung Electronics, the global leader in memory semiconductor manufacturing, may record a quarterly loss for the first time ever in the first quarter of 2023. This is mainly due to the challenging environment in the semiconductor industry, which has been impacted by a combination of factors such as supply chain disruptions, a global shortage of semiconductors, and the aftereffects of the pandemic.
Samsung Electronics’ Predicted Q1 Performance
According to a recent report by Daol Investment & Securities, Samsung Electronics is predicted to record an operating loss of 68 billion won in the first quarter. This would mark the first time the company has recorded a (first quarter) quarterly loss in the past 14 years.
Sales for the first quarter are expected to decrease by 21.1% year-on-year to 61.3 trillion won, while the semiconductor division is estimated to suffer an operating loss of 4.1 trillion won.
Other securities companies have also predicted operating losses for Samsung Electronics’ Device Solutions (DS) division, as well as for its semiconductor division, with some estimates ranging from 1.9 trillion won to 4.5 trillion won.
Predicted Losses for SK Hynix & Samsung’s Increased Market Share
The semiconductor industry is also expected to suffer significant losses in the first quarter of the year, with operating losses for South Korea’s memory industry predicted to amount to trillions of won. SK Hynix, Samsung’s main competitor in the memory semiconductor industry, has already experienced a quarterly deficit in the fourth quarter of 2022, which was the first time in ten years.
Securities companies are predicting an even bigger deficit in the first quarter of 2023, with estimated losses exceeding 4 trillion won. This is due to declining demand from client companies and the simultaneous declines in memory shipments and prices.
Market Share Gap Expected to Widen
While other global memory businesses have been implementing large production cuts since the second half of last year, Samsung Electronics has stuck to a policy of no cutbacks to production. According to the Taiwan-based market research company TrendForce, Samsung Electronics’ DRAM market share was 45.1% in the fourth quarter of 2022, up by 4.4% from the previous quarter.
In contrast, the second- and third-place companies, SK Hynix and Micron saw their respective market shares drop to 27.7% and 23.0%. Samsung Electronics also accounted for a NAND market share of 33.8% in the fourth quarter of 2022, up by 2.4% from the previous quarter.
While the situation doesn’t seem pleasant, it remains to be seen what’s in store for Samsung in the future. Till then, we will make sure to keep you updated as new information becomes available.