Samsung introduces Q1 2024 Performance, Sets Tech Industry Abuzz

Samsung Electronics has announced its financial results for the first quarter of 2024, revealing a consolidated revenue of KRW 71.92 trillion. The strong sales of flagship Galaxy S24 smartphones and higher prices for memory semiconductors contributed to this success. The company’s operating profit also increased to KRW 6.61 trillion, with the Memory Business returning to profit by meeting the demand for high-value-added products.

The Mobile eXperience (MX) Business also reported higher earnings, while the Visual Display and Digital Appliances businesses recorded increased profitability. The positive impact of the weak Korean won against major currencies further boosted the company-wide operating profit.

In terms of capital expenditures, Samsung invested KRW 11.3 trillion in the first quarter, with a focus on memory facilities and packaging technologies to address the demand for advanced products like High Bandwidth Memory (HBM) and DDR5. The company also made significant investments in IT OLED products and flexible display technologies.

Looking ahead to the second quarter, Samsung expects the industry to remain solid, driven mainly by demand for generative AI. The continuous increase in the supply of AI servers and associated cloud services is expected to drive demand for HBM and conventional servers and storage solutions. While mobile demand is predicted to remain stable, PC customers may adjust their inventories ahead of new product launches in the second half of the year.

Samsung has already started mass production of HBM3E 8H and plans to produce HBM3E 12H products and a 128 GB product based on 1b nanometer (nm) 32Gb DDR5 within the second quarter. Additionally, the company has begun mass production of V9 NAND for the first time in the industry.

In the second half of 2024, Samsung anticipates positive business conditions with strong demand for generative AI, despite potential volatility stemming from macroeconomic trends and geopolitical issues. The company plans to increase the supply of HBM and accelerate the supply of 1b nanometer-based 32Gb DDR5 in the DRAM market. It also aims to enhance its technology leadership in NAND by mass-producing quad-level cell (QLC) for V9.

The System LSI Business faced challenges in the first quarter as Display Driver IC2 (DDI) sales were impacted by slowing panel demand. However, with smartphone sell-out expected to recover, the business will focus on providing a stable supply of flagship SoCs and sensors. Samsung is also preparing to ship products based on advanced technologies for new wearables.

The Foundry Business experienced a delay in sales improvement due to weak market demand and continued inventory adjustments. However, efficiency efforts in fab operations helped narrow losses slightly. Samsung’s development of advanced technologies like 3 nm and 2 nm is progressing smoothly, and the company achieved its highest-ever order backlog in the first quarter. Second-quarter revenue is expected to rebound and reach double-digit quarter-on-quarter growth.

Samsung’s Display Corporation (SDC) aims to focus on flexible displays, IT, and automotive sectors to achieve sales growth in large panels. While the mobile display business faced intensified competition, SDC ensured timely supply and improved utilization rates for flexible and rigid displays. The large display business narrowed losses despite a curb in demand.

In the second half of the year, SDC plans to maintain competitiveness by expanding sales of low power consumption and durable flexible displays. It also aims to increase large display sales by improving production efficiency and focusing on high-value-added products.

The MX and Networks businesses achieved revenue and operating profit growth in the first quarter, despite a decline in market demand for premium and mid-range smartphone segments. The MX Business attributed its success to strong sales of the Galaxy S24 series and high usage rates of Galaxy AI features.

Looking ahead, the MX Business expects overall smartphone demand to decline in the second quarter due to seasonality. However, it plans to maintain its flagship-oriented sales approach and invest in R&D, including AI, to drive growth. The MX Business aims to rebound in the second half of the year through the expansion of AI products and services, economic growth in emerging markets, and the launch of new flagship models.

The Visual Display and Digital Appliances businesses posted higher profitability in the first quarter, driven by premium products like Neo QLEDs, OLEDs, and larger TVs. However, stagnant TV market demand and increased costs affected profitability year-on-year.

In the second quarter, overall TV demand is expected to remain weak, but major global sporting events may present opportunities for increased sales. The Visual Display Business will focus on securing profitability, enhancing sales of strategic products, and strengthening operations management.

Looking ahead to the second half of 2024, Samsung expects gradual recovery in overall TV demand. The Visual Display Business plans to address diverse consumer needs and promote “AI Screen Leadership” through innovative premium TVs and Lifestyle screens. It will also focus on connected devices, advanced features, and service businesses like Samsung TV Plus to drive market growth.

Overall, Samsung’s first-quarter results demonstrate strong performance in various business sectors, including smartphones, memory semiconductors, displays, and digital appliances. The company remains optimistic about future growth opportunities, particularly in AI-related technologies and emerging markets.

Background Information

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About Samsung:

Samsung, a South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.

  

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Technology Explained

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DDR5: DDR5 (Double Data Rate 5) is the next generation of memory technology for the computer industry. It is a modern day improvement on earlier DDR technologies, with faster speeds, greater bandwidth and higher capacities. DDR5 enables higher resolution, seamless gaming experiences and faster data transfer rates, making it an ideal choice for high-performance computing and 4K gaming. With its greater RAM compatibility, DDR5 provides faster buffering times and raised clock speeds, giving users an improved overall work system. DDR5 is also optimized for multi-tasking, allowing users to multitask without experiencing a significant drop in performance, increasing the productivity of digital tasks. As an ever-evolving technology, DDR5 is paving the way for the computer industry into a new and powerful era.

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Foundry: A foundry is a dedicated manufacturing facility focused on producing semiconductor components like integrated circuits (ICs) for external clients. These foundries are pivotal in the semiconductor industry, providing diverse manufacturing processes and technologies to create chips based on designs from fabless semiconductor firms or other customers. This setup empowers companies to concentrate on innovative design without needing substantial investments in manufacturing infrastructure. Some well-known foundries include TSMC (Taiwan Semiconductor Manufacturing Company), Samsung Foundry, GlobalFoundries, and UMC (United Microelectronics Corporation).

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HBM3E: HBM3E is the latest generation of high-bandwidth memory (HBM), a type of DRAM that is designed for artificial intelligence (AI) applications. HBM3E offers faster data transfer rates, higher density, and lower power consumption than previous HBM versions. HBM3E is developed by SK Hynix, a South Korean chipmaker, and is expected to enter mass production in 2024. HBM3E can achieve a speed of 1.15 TB/s and a capacity of 64 GB per stack. HBM3E is suitable for AI systems that require large amounts of data processing, such as deep learning, machine learning, and computer vision.

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NAND: NAND technology is a type of non-volatile memory that is used in many computer applications. It is a type of flash memory that is used to store data in a non-volatile manner, meaning that the data is not lost when the power is turned off. NAND technology is used in many computer applications, such as solid-state drives, USB flash drives, digital cameras, and memory cards. It is also used in many embedded systems, such as cell phones, tablets, and other consumer electronics. NAND technology is a reliable and cost-effective way to store data, making it a popular choice for many computer applications.

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OLED: Organic light-emitting diode (OLED) technology is a cutting-edge display technology that has revolutionized the computer industry by producing superior image quality and superior energy efficiency. OLED technology works by using organic compounds to create an efficient and flexible light source. This type of technology has enabled thinner and lighter designs as well as improved color range and resolution. OLED technology is currently used in laptop displays and is increasingly used in televisions and mobile devices. Its benefits, such as relatively low power consumption and extraordinary brightness, give a more vivid and more powerful image even in dim areas. OLED technology has also improved computer performance, as its power efficiency passes on to other computer components and leads to extended battery life. OLED technology also features shorter response time and full color reproducibility, making it ideal for fast-paced action games.

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