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Samsung Q1 2024: Memory Muscles Flex, MX Maintains Momentum, But Display Dimness Persists

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Samsung Electronics reported solid results in quarter ending March 2024, driven by strong sales of flagship Galaxy S24 smartphones and a rebound in the memory chip business. The company’s total revenue reached KRW 71.92Tn, with operating profit increasing to KRW 6.61Tn.

Samsung Earnings

Segment-wise Performance:

  • Memory Business: This division made a significant comeback, achieving profitability by focusing on high-value products like HBM and DDR5. Demand from AI applications in servers and storage played a key role.
  • Mobile eXperience (MX) Business: Despite a seasonal market decline, the MX business saw revenue and profit growth thanks to the success of the Galaxy S24 series and continued focus on resource optimization.
  • Device Solutions (DS) Division: The Foundry Business saw delayed sales improvement, but progress in advanced technology development led to a record order backlog. The System LSI Business faced challenges in display driver IC sales but is set to benefit from upcoming wearable launches.
  • Samsung Display Corporation (SDC): While mobile display earnings declined, SDC secured timely supply for a major customer’s high-end smartphones. The large display business narrowed losses with new QD-OLED products.
  • Visual Display and Digital Appliances: This division achieved higher profitability by focusing on premium TVs. However, stagnant market demand and rising costs pose challenges.

Big Picture and Outlook:

The overall outlook for Samsung is cautiously optimistic. The memory business is expected to remain solid due to AI demand, while the MX business anticipates a rebound in the second half. However, uncertainties in the TV market and rising component costs are concerns.

Key Strategies:

  • The company will continue to invest in advanced memory technologies like HBM3E and DDR5.
  • The MX business plans to maintain its flagship focus and expand Galaxy AI across its product lines.
  • SDC aims to expand sales of flexible displays and high-value large panels.
  • Samsung will focus on operational efficiency and R&D investments in AI to navigate rising costs and a challenging environment.

In conclusion, Samsung’s first-quarter performance highlights the importance of memory chips and premium smartphones. Samsung is well-equipped to capitalize on the rising AI momentum, but successfully navigating headwinds in the display and foundry businesses will be crucial for Samsung’s success in H2 2024.

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