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Samsung predicts that its profits from the chip market will halve in 2023

According to Korean publication The Elec, Express Solutions (DS), which operates Samsung Foundry, System LSI and Memory Division, has forecast its operating profit to be around 13.1 trillion won in 2023. Apparently, this figure was shared in a memo sent to the company’s employees on Wednesday.

2024 can change the bad situation of 2023 for Samsung

If this forecast turns out to be true, Samsung’s annual operating profit from its semiconductor business in 2023 will be half of what analysts predict it will be this year; That is about 26 trillion won. A significant decline in operating profit will be a direct result of the continuing downward cycle in the chip industry. According to reports, Samsung’s mobile division will no longer use Exynos chips in its flagship phones; For this reason, 2023 forecasts for the DS segment seem inaccurate.

Although 2023 looks bad for Samsung, analysts have predicted that the chip market will recover in 2024, and this is when things could be better; Because Samsung is expected to close the contract for the production of Google Tensor G3 chip and Qualcomm’s Snapdragon 8 Gen 3 chip on the 3nm GAA node.

Samsung employees will receive lower bonuses in 2024

At the beginning of the year, Samsung pays employees performance bonuses based on their performance in the previous year. Since performance bonuses are based on the company’s operating profit, Samsung should share these figures with its employees for the coming year so they know what to expect in the future.

In the bonus memo that the company shared this year, it was mentioned that the operating profit in 2023 will be about 13.1 trillion won. If Samsung’s DS division reaches its expected operating profit in 2023, employees will receive a bonus of between 5% and 11% in January 2024. In order for employees to receive the maximum bonus of 50 percent, Samsung must achieve an operating profit of 28 trillion won, which is impossible given the current crisis in the semiconductor market.

Samsung’s smartphone division profits will decline in 2023

Samsung recorded lower operating profit from its DX (user experience) and mobile segments in Q3 2022 due to higher component prices. Galaxy S23 will use even more expensive components; But according to reports, Samsung will launch it at the same price as the Galaxy S22, which means that the mobile segment will also see less profit in 2023.


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