Samsung’s chip division recorded a steep operating loss of 4.36 trillion won in the second quarter due to the global economic downturn that is causing weak demand for IT products.
However, inventory of chips peaked in May and is declining, the South Korean tech giant said, a sign that demand for chips may have bottomed out.
In total, in the second quarter, Samsung reported 60 trillion won in revenue and 668.5 billion won in operating income. Compared to a year prior, revenue dropped 22.28% and operating income nosedived 95.26%.
As in the previous quarter, the poor performance of the Device Solutions (DS) Division, Samsung’s chip division, is the main cause, though the division narrowed its operating loss by 220 billion won compared to the prior quarter.
However, the company said its DRAM shipment, thanks to demand for DDR5 and HBM, exceeded guidance announced in the prior quarter. Its inventory also peaked out in May, Samsung added.
Its foundry business also saw profitability decline from low demand caused by the global economic downturn, the tech giant said. The operation rate of 8-inch and 12-inch legacy nodes substantially dropped.
In logic, Samsung System LSI also performed poorly from delay the recovery of parts in mobile, the company said.
The tech giant said it plans to expand the sales of high-end DRAM and gain new foundry orders during the second half of the year. It will optimize a portfolio centered around high value, high capacity products through flexible operation of supply, Samsung said.
Samsung System LSI will secure performance in SoC for adoption in flagship models and also seek to diversify solutions outside of smartphones such as offering chips for automobiles, the tech giant said.