Samsung recently posted its lowest profit in 14 years because of the economic slowdown and lower chip demand. The operating profit remained at KRW 13.8 trillion (roughly $10.4 billion) YoY, with the chip business contributing KRW 13.3 trillion (approx $10 billion), registering an operating loss of KRW 4.58 trillion (approx $3.4 billion).
The poor performance of the chip industry is expected to slump further, and to mitigate the operating loss, according to new reports, Samsung has ordered its TV and smartphone businesses to find a way to boost their earnings. Apparently, Samsung recorded KRW 63.75 trillion in revenue (roughly $48 billion), with operating profit standing at KRW 640 billion (roughly $483 million) in Q1 2023, which is a dip of 18% and 95%, respectively, compared to Q1 2022.
Samsung's smartphone unit has decided to launch its next foldables earlier than usual
Samsung's TV business also posted lower earnings in Q1 2023 compared to its rival, LG Electronics. Its smartphone business is also expected to remain stagnant since there are no growth boosters for the upcoming quarter. To tackle the scenario, Samsung's Business Support Task Force, the main control tower of the conglomerate, has ordered two business units to find new ways to boost their earnings.
And as a result of this order, Samsung MX (smartphone division) has decided to launch this year's foldable three weeks faster than their usual launch dates in the hope that this will improve their earnings. However, it will be interesting to see how the TV business responds to this order as the price of the liquid crystal display (LCD) panels is expected to go up in Q2 compared to Q1. If this is true, then the TV business will incur more costs while demand remains gloomy.