Samsung Electronics' semiconductor performance in the third quarter of 2023 saw its deficit narrow, driven by record-high quarterly foundry orders and a recovery trend in memory.

Samsung Electronics disclosed its business results for the third quarter of 2023 on the 31st. Based on consolidated financial statements, revenue was 67.4047 trillion won, down 12.2% from the same period last year, and operating profit was 2.4336 trillion won, down 77.6% from the same period last year. Net profit was 5.8441 trillion won, down 37.8% from the same period last year.

Despite weak semiconductor performance, revenue improved compared to the previous quarter due to the launch of new flagship smartphones and expanded sales of premium display products. Similarly, operating profit increased compared to the previous quarter as the deficit in the DS division narrowed, driven by robust sales of flagship smartphones and increased demand for new products from major display customers.

The DS (Device Solutions) division recorded sales of 16.44 trillion won and an operating loss of 3.75 trillion won.

The deficit in memory semiconductors narrowed compared to the previous quarter due to increased sales of high-value products such as HBM (High Bandwidth Memory), DDR5 (Double Data Rate 5), and LPDDR5x, as well as some price increases.

In addition, as the perception that the market has hit its bottom spreads, numerous purchasing inquiries have been received from clients seeking to secure parts inventory.

System LSI saw sluggish performance improvement due to delayed recovery in demand from key applications and inventory adjustments.

Although the foundry business continued to experience sluggish performance due to factors such as declining line utilization rates, it solidified its preparations for the future by achieving its highest-ever quarterly orders, centered on High Performance Computing (HPC).

The DX (Device eXperience) division recorded sales of 44.02 trillion won and an operating profit of 3.73 trillion won.

MX (Mobile eXperience) showed solid growth in sales and operating profit compared to the second quarter due to the launch of a new flagship model.

Sales of new products in the third quarter, including smartphones, tablets, and wearables, were all strong, and overall revenue grew and double-digit profitability was secured as the proportion of flagship products increased and the average selling price rose.

The network is North due to reduced investment by telecommunications operatorsSales in major overseas markets, including the U.S., decreased.

In the case of VD (Visual Display), although global TV demand decreased compared to the same period last year, the company expanded its leadership in the premium market and improved profitability compared to the same period last year by focusing on the sales of high-value products such as Neo QLED, OLED, and ultra-large displays.

Home appliances recorded performance at the same level as the previous year due to a decrease in the peak season effect.

Harman recorded sales of 3.8 trillion won and an operating profit of 450 billion won.

Harman achieved its highest-ever quarterly performance driven by increased orders from automotive clients and expanded sales of consumer audio and car audio, including portable speakers.

SDC recorded sales of 8.22 trillion won and an operating profit of 1.94 trillion won.

In the display business, profits for small and medium-sized panels increased significantly compared to the previous quarter by actively responding to the launch of flagship products by major clients. For large panels, the deficit narrowed due to improved yield and cost reductions.

With global IT demand expected to gradually improve in the fourth quarter, the DS division plans to maintain solid profitability by focusing on expanding sales of high-value products such as HBM and technological leadership, while the Display and DX divisions will strengthen their premium strategies.

Capital expenditure in the third quarter was 11.4 trillion won, with 10.2 trillion won for the DS division and 700 billion won for the display division by business sector. Cumulative investment for the first three quarters totaled 36.7 trillion won, comprising 33.4 trillion won for the DS division and 1.6 trillion won for the display division.

Annual facility investment in 2023 is expected to reach approximately 53.7 trillion won, marking the largest annual facility investment execution. By business segment, DS is 47.5 trillion won and Display is 3.1 trillion won.

In the case of memory, the completion of Pyeongtaek Phase 3 to meet mid-to-long-term demand, investment in the framework of Phase 4, and an increased proportion of R&D investment to strengthen technological leadership are expected. In particular, investments in new technologies are being actively pursued, including investments to secure HBM production capacity at the industry's highest level.

The foundry business is expected to grow year-on-year due to the expansion of production capacity in Pyeongtaek to meet demand for advanced processes and infrastructure investment in the Taylor plant in the U.S. to prepare for the future.

Investments in the display sector are planned to focus on supporting IT OLEDs and flexible products.