Samsung’s Device Solutions division, which houses the memory, chip design and manufacturing divisions, will go through a tough time this year, South Korean publication The Elec reported. At the same time, Samsung’s smartphone revenues are expected to decline.Semiconductor and telephone revenues will fall
The operating profit of the Samsung Device Solutions division, which houses the Samsung Foundry, System LSI and Memory Division, is expected to be KRW 13.1 trillion, or $10.3 billion, in 2023. According to the reports, this estimate has been shared with the employees by the company. If the forecast turns out to be correct, Samsung’s annual operating profit from its semiconductor business in 2023 will be half of what analysts predicted this year. The significant decline in operating profit may be the result of ongoing problems in the chip industry.
As it is known, new Exynos chips will not be used in the Galaxy S23 series, and the loss for the company here will affect the profitability of the company. Although 2023 looks bad for Samsung, according to analysts, 2024 may be strong for the South Korean giant. Samsung is expected to resolve the efficiency issues in the 3nm process and switch to a more advanced manufacturing technology by 2024. If high efficiency is achieved, Samsung can produce Google’s Tensor G3 and Qualcomm’s Snapdragon 8 Gen 3 chip.
Samsung pays its employees performance incentives at the beginning of the new year, based on their employees’ performance in the previous year. This bonus is paid out of the company’s profits that exceeded the previous year’s target. Therefore, falling profitability will also cause employees to receive lower bonuses. However, Samsung used more expensive components in the Galaxy S23, but the new models are expected to come out at the same price level as the previous series. Therefore, the profitability of the mobile side will probably decrease.
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