On the 27th, Samsung Electronics reported financial results for the June 30, 2023 second quarter.

The Company posted KRW 60.01 trillion in consolidated revenue, a 6% decline from the previous quarter, mainly due to a decrease in smartphone shipments despite a slight recovery in the income of the DS (Device Solutions) Division. Operating profit rose sequentially to KRW 0.67 trillion as the DS Division posted a narrower loss, while Samsung Display Corporation (SDC) and the Digital Appliances Business saw improved profitability.

The Memory Business saw results improve from the previous quarter. 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. System semiconductors posted a decline in profit due to lower utilization rates due to weak demand from major applications.

In the mobile panel business, earnings were similar to the previous quarter on the back of solid sales of premium panels. In contrast, the large panel business continued to focus on QD-OLEDs in the premium market.

The Device eXperience (DX) Division achieved strong profitability due to higher sales of premium TVs and digital appliances, an improved cost structure, and increased operational efficiency. The network business's revenue declined in major overseas markets, including North America and Japan.

Harman posted revenue and profit growth, led by demand for consumer audio, such as portable and True Wireless Stereo products. Harman also won the quarter's most significant automotive order in its history.

The weakness of the Korean won against the US dollar, euro, and significant emerging currencies positively impacted company-wide operating profit.

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

The DS Division will focus on sales of high-value-added products such as DDR5, LPDDR5x, and HBM amid expectations of a recovery in demand. It will continue to strengthen mid- to long-term competitiveness by increasing investments in infrastructure, R&D, and packaging technology while also enhancing the completeness of the Gate-All-Around (GAA) process.

SDC's mobile panel business is expected to post improved earnings as major customers launch new smartphone models. In contrast, the large panel business will address year-end seasonal demand with a supply of ultra-large panels.

The DX Division plans to sustain solid profitability with new foldable smartphone and wearable launches and increase sales of premium TVs and digital appliances. The Networks Business aims to win new projects to grow revenue and reinforce technology leadership in 5G core chips and software-based virtualized Radio Access Networks (vRAN).

The Digital Appliances Business plans to expand the Bespoke lineup globally and increase sales of energy-efficient products featuring the Energy Savings Mode on SmartThings. At the same time, Harman is expected to improve profitability with higher sales of consumer audio products.

The Company's total capital expenditures in the second quarter stood at KRW 14.5 trillion, including KRW 13.5 trillion for semiconductors and KRW 0.6 trillion for displays. Spending on memory was concentrated on completing the P3 infrastructure and the P4 framework for mid-to-long-term supply. Foundry investments focused on fabs in Taylor, Texas, and Pyeongtaek, Korea, to address the demand for advanced nodes, while investments in displays concentrate on infrastructure and module production enhancements. 

■Memory Business To See Improved Growth Amid Stabilizing Market
The DS Division posted KRW 14.73 trillion in consolidated revenue and KRW 4.36 trillion in operating losses for the second quarter.

The Memory Business achieved its bit growth guidance even as it saw more limited price drops for both DRAM and NAND, which ultimately contributed to a quarter-on-quarter improvement in performance. As server customers continued inventory adjustment, overall purchase demand had not yet recovered. However, due to the strong demand for generative AI, investment from the data center sector was concentrated on AI servers.

■In the second quarter, the System LSI Business posted a lower-than-expected improvement in its earnings due to the delayed demand recovery for semiconductors and customers' continued inventory adjustments.

However, the System LSI Business won a design award for automotive SoCs with a domestic OEM for their 2025 premium model, and it also continued efforts to expand SoC applications, including actively discussing mid- to long-term cooperation with European customers.

■The Foundry Business saw its revenue increase quarter-on-quarter in the second quarter thanks to increased sales to some US customers. Still, operating profit declined significantly as utilization decreased due to fab expansion and uncertainties in short-term demand.

The Foundry Business will lay the foundation for growth by advancing the development completeness of the 3nm GAA process with improved Power, Performance, and Area (PPA) and by expanding orders from large customers.

It will keep striving to grow its product portfolio by continually developing mature processes, such as 8nm eMRAM and 8-inch technologies for automotive applications.

■SDC To Leverage New Technology To Build on Earnings
SDC posted KRW 6.48 trillion in consolidated revenue and KRW 0.84 trillion in operating profit for the second quarter.

SDC achieved results similar to the previous quarter's for mobile panels and thus maintained its market share by supplying OLED panels with outstanding performance and technology.

For the large panel business, SDC has been improving its business fundamentals with enhanced yield and productivity, and it is also strengthening the premium position of its QD-OLED products with the product mix upgrade centered on ultra-large 77-inch TVs.

■Mobile To Focus on New Foldable and Galaxy Ecosystem Devices in 2H
The Mobile Experience (MX) and Networks businesses posted KRW 25.55 trillion in consolidated revenue and KRW 3.04 trillion in operating profit for the second quarter.

Overall market demand declined from the previous quarter due to continued macroeconomic factors, including high-interest rates and inflation.

Sales decreased sequentially for the MX Business as the effect of the Galaxy S23 launch from Q1 faded. Mass market recovery was also delayed due to the continued economic downturn, affecting Q2 sales.

For the second half of 2023, the overall smartphone market is expected to return to year-on-year growth, especially in the premium market.

However, external forecasts for market growth have also been lowered amid risks of a prolonged global economic downturn.

The MX Business will also focus on boosting sales of its tablets and wearables, with a strong focus on its new high-end models, announced this week at the Galaxy Unpacked event.

Through such activities and initiatives, the MX Business intends to grow its annual revenue in 2023 while securing double-digit profitability through enhanced operational efficiency.

■Visual Display and Digital Appliances To Maintain Robust Performance in 2H
The Visual Display and Digital Appliances businesses recorded KRW 14.39 trillion in consolidated revenue and KRW 0.74 trillion in operating profit for the second quarter.

Demand for TVs declined quarter-on-quarter due to seasonal spending trends, but the orders' decrease started to ease compared to the previous year. The Visual Display Business posted higher results year-on-year by focusing on sales of high-value-added products, such as Neo QLED/OLED/ultra-large TVs, and reducing overall costs.

In the second half of 2023, the Visual Display Business expects seasonal strength to ease the decline in overall TV demand amid continued uncertainties in the business environment, while the premium market is projected to remain robust.

By_BK Min, KDFN kdf@kdfnews.com

The summary of this article in Korean is as follows.

■삼성전자 2분기 영업이익 6685억원…1분기 대비 소폭 개선

삼성전자가 연결 기준으로 올해 2분기 매출액 60조55억원, 영업이익 6685억원을 기록했다.

매출액과 영업이익은 지난해 2분기 보다 각각 22.28%, 95.26% 감소했다. 다만, 지난 1분기(6402억원)와 비교하면 영업이익은 소폭 증가했다. 삼성전자는 스마트폰 출하 감소에 따른 부정적 영향이 있었으나 DS부문 적자폭이 축소되고 디스플레이·TV·생활가전 수익성이 개선됐다고 설명했다.

주력 사업인 반도체(DS)부문의 2분기 매출액은 14조7300억원, 영업손실액은 4조3600억원이다. 1분기 영업손실액 4조5800억원 보다 적자폭이 축소됐다. 그러나 1분기에 이어 2개 분기 연속 4조원대 적자를 면치 못했다.

스마트폰, 가전 등을 담당하는 디바이스경험(DX)부문은 매출 40조2100억원, 영업이익 3조8300억원이다.

MX(Mobile eXperience)은 글로벌 스마트폰 수요 감소 추세 속에 플래그십 신제품 출시 효과가 줄면서 프리미엄 비중이 감소했고, 경기 침체로 인해 중저가 시장 회복이 지연돼 전분기 대비 매출이 감소했다. 하지만 갤럭시S23 시리즈가 전작 대비 견조한 판매를 이어갔고, A시리즈 상위모델 등의 판매 호조로 두 자릿수 수익성을 유지했다. 

삼성디스플레이는 매출 6조4800억원, 영업이익 8400억원, 전장 자회사인 하만은 매출 3조5000억원, 영업이익 2500억원을 각각 기록했다.

삼성전자의 2분기 시설투자액은14조5000억원이다. 사업별로는 DS부문 13조5000억원, 디스플레이 6000억원 수준이다. 상반기 누계로는 총 25조3000억원이 집행됐다. DS부문 23조2000억원, 디스플레이 9000억원이다.

메모리의 경우 지난 분기와 유사하게 중장기 공급성 확보를 위한 평택 3기 마감, 4기 골조 투자와 첨단공정 수요 대응 목적으로 평택 중심 설비 투자를 진행했다. 미래 경쟁력 강화를 위한 R&D 및 후공정 투자도 지속했다.

삼성전자는 "하반기는 글로벌 IT 수요와 업황이 점진적으로 회복될 것으로 기대되는 가운데, 부품 사업 중심으로 상반기 대비 전사 실적 개선이 예상된다"면서도 "단, 거시경제 리스크 등으로 인한 수요 회복 관련 불확실성은 계속될 전망"이라고 했다.

DS부문은 하반기에 ▲DDR5 ▲LPDDR5x ▲HBM3 등 고부가 제품 판매와 신규 수주를 확대할 방침이다. 또 인프라 및 R&D, 패키징에 투자를 지속하고 GAA(Gate-All-Around) 공정 완성도 향상 등으로 중장기 경쟁력을 강화할 계획이다. 

DX부문은 ▲폴더블 스마트폰 ▲태블릿 ▲웨어러블 등 주요 신제품을 성공적으로 출시하고 TV/가전 프리미엄 제품 판매를 확대해 견조한 수익성을 유지한다는 방침이다.

한편, 삼성전자는 지난 6월 2023년 지속가능경영보고서를 발간했다. 환경경영 관련 DX부문은 2022년에 국내 전 사업장, 베트남, 인도, 브라질 제조사업장에서 100% 재생에너지 사용을 달성했고, 자원순환성 강화를 위해 재생레진 적용 플라스틱 사용량을 2021년 대비 3배 확대했다. 삼성전자는 앞으로도 ESG 경영을 지속 강화할 방침이다.

김상록 기자 kdf@kdfnews.com