Samsung Electronics Posts KRW 1.9 Trillion Semiconductor Operating Profit in 1Q... Returns to Profit After 5 Quarters

DRAM and NAND Price Increase Boosts Performance
Company-wide Operating Profit 6.6 Trillion Won... Surpassing Last Year's Operating Profit
'Galaxy S24' Strong Sales Also Contribute to Performance Growth

Samsung Electronics has successfully turned around its core semiconductor business by recording an operating profit close to 2 trillion won. The reduction in memory supply led to price increases in DRAM and NAND, reducing inventory valuation losses and resulting in better-than-expected strong performance. Due to the improved earnings, investments reached a record high on a quarterly basis.

On the 30th, Samsung Electronics announced through a public disclosure that the semiconductor (DS) division recorded sales of 23.14 trillion won and an operating profit of 1.91 trillion won. This marks the first quarterly profit in the semiconductor division in five quarters since Q4 2022.

The reversal of inventory valuation loss provisions due to rising prices of core products DRAM and NAND significantly contributed to profitability improvement. This means the burden of inventory losses decreased as product prices rose. The memory market showed strong overall purchasing demand amid ongoing price increase expectations, with continued strong demand for Double Data Rate (DDR) 5 and high-capacity Solid State Drives (SSD) following the previous quarter.

System LSI saw increased supply of components such as System on Chip (SoC) and sensors for new products from major customers. However, performance improvement was slower than expected due to decreased DDI sales caused by panel demand slowdown.

In Foundry, sales improvement was delayed due to ongoing inventory adjustments by major customers, but the deficit narrowed somewhat. Additionally, by stabilizing 4-nanometer process yields and significantly expanding product production centered on key customers, the division achieved the largest-ever first-quarter order record.

Including semiconductors, the overall first-quarter consolidated results showed sales of 71.9156 trillion won and operating profit of 6.606 trillion won, representing increases of 12.8% and 931.9% respectively compared to the same period last year. Quarterly sales surpassing 70 trillion won was the first time in five quarters since Q4 2022 (70.4646 trillion won).

The strong sales of the flagship smartphone 'Galaxy S24', launched at the end of January, also contributed to the earnings increase. The Mobile Experience (MX) division, responsible for smartphones, recorded sales of 33.53 trillion won and operating profit of 3.51 trillion won. The Galaxy S24 series, equipped with AI, has been evaluated as a successful early hit, breaking pre-order sales records for the S series in major global regions. Industry insiders estimate the average selling price (ASP) of Samsung smartphones in Q1 rose nearly 30% from the previous quarter to around $330?$340 (approximately 440,000?450,000 won), reflecting a higher proportion of premium models.

Samsung Electronics plans to accelerate securing future competitiveness by spending the largest-ever quarterly research and development expenses. First-quarter facility investment was 11.3 trillion won, with 9.7 trillion won for semiconductors and 1.1 trillion won for displays, an increase of 600 billion won compared to the same period last year.