Samsung Electronics decided to incline up its investment this year. The decision was made despite a debt of four trillion won in the semiconductor sector. Now this turn by the Korean semiconductor behemoth indicates that it actively brace for an upturn in the segment.
Since Samsung Electronics’ first quarter results are unfavorable. The accomplishment in all divisions along with Memory Semiconductor, Foundry, and System LSI (fabless) Divisions shrink. In terms of percentage, the DS Division’s sales dropped 49 percent, which turned its operating profit into a loss. While the Memory Semiconductor Division’s sales dropped by 56 percent. This results from the crumbling consumer sentiments out of global economic uncertainties. The same does not improvise over time, resulting in a huge dropped in product pricing.
The South Korean tech firm somehow manage to avoid loss with the effective sales of the Galaxy S23 smartphone. Simultaneously its other divisions facing difficulties. At the same time, as per experts, there’s no big difference in the business performance in the second quarter. Since the semiconductor industry is presently in the middle of a drop. Whereas, the smartphone sales that offset the losses in the first quarter are predicted to drop.
Instead of this crisis, Samsung Electronics is targeting the chances of improvising its performance in the second half of the year. According to the company, the condition is serious but still, there are clear indications of change in the market environment.
Investment in Figure
Talking about the investment then it’s 17 trillion won in the first quarter. Substantially, it is the largest ever quarterly investment. Out of this amount, 6.58 trillion tons is split for research and development. Notably, this amount is more than 10 times compared to the operating profit of 640 billion won in the first quarter.
Its potential investment also grows by 35.4 percent from 7.9 trillion won in the first quarter of 2022 to 10.7 trillion won in the same period of 2023 respectively. Out of the same, 91.6 percent was allocated to semiconductor facilities. Moreover, this year also, the company plans to maintain its yearly investment at a similar level to that of 2022, which is the largest ever.
Samsung Electronics also expressed its intention to participate in negotiations on the U.S. CHIPS Act. “The U.S. government has said that it will collect opinions from the semiconductor industry and refine its plans through negotiations with chipmakers,” said Seo Byung-hoon, vice president of Samsung Electronics. “Samsung Electronics will take part in this procedure as well.”
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