The Company posted KRW 86.1 trillion in consolidated revenue, an increase of 15.4% compared to the previous quarter. Operating profit increased to KRW 12.2 trillion.

The Device Solutions (DS) Division reported a 19% increase in sales quarter-on-quarter (QoQ), with the Memory Business setting an all-time high for quarterly sales, driven by strong growth of HBM3E and server SSDs.  Meanwhile, the Device eXperience (DX) Division posted a revenue increase of 11% QoQ due to the successful launch of new foldable phones and solid flagship sales.

Looking ahead to Q4, the rapid growth of the AI industry is expected to open up new market opportunities for both the DS and DX Divisions. The DS Division plans to focus on enhancing its performance by increasing sales of high-value-added memory products tailored to AI. The semiconductor market is expected to remain strong, driven by ongoing AI investment momentum.

Meanwhile, the DX Division will strengthen its efforts to launch AI products equipped with the most innovative technologies through open collaborations with leading global partners in respective business segments.

Semiconductors Achieve High Profits, To Continue Meeting Server Demand

The DS Division posted KRW 33.1 trillion in consolidated revenue and KRW 7.0 trillion in operating profit for the third quarter.

In Q3 2025, the Memory Business achieved record-high quarterly revenue by expanding HBM3E sales while proactively addressing strong demand across all applications. HBM3E is currently in mass production and being sold to all related customers, while HBM4 samples are simultaneously being shipped to key clients. A favorable price environment and notably reduced one-off costs such as inventory value adjustments contributed to higher profits.

In Q4 2025, the Business will actively respond to demand from AI and conventional servers with HBM3E, high-density eSSDs and other leading-edge memory offerings. Additionally, it will continue to expand sales of industry-leading, high-value-added server memory products, such as 128GB and higher DDR5, as well as 24Gb GDDR7.

Going forward in 2026, the Memory Business will focus on the mass production of HBM4 products with differentiated performance, while simultaneously aiming to scale out the HBM sales base. In particular, demand for HBM4 is also projected to increase, and the Company plans to proactively respond with capacity expansion in 1c. It will also concentrate on expanding sales of other high-value-added products, such as DDR5, LPDDR5x and high-density QLC SSDs to meet demand for AI applications.

Earnings for the System LSI Business stalled due to seasonality and customer inventory adjustments, despite a stable supply of premium systems-on-chip (SoCs).

In Q4 2025, the Business will aim to expand sales of premium SoCs and image sensors amid continued weak demand from major customers.

In 2026, the System LSI Business plans to strengthen the competitiveness of the Exynos processor for key flagship models and leverage differentiated image sensor technologies to broaden market presence.

The Foundry Business posted a significant improvement in earnings in Q3 2025, stemming from a reduction in one-off costs and better fab utilization. The Business also achieved record-high customer orders, mainly on advanced nodes.

In Q4 2025, the Business will aim for continued earnings improvement by ramping up mass production of 2nm Gate-All-Around (GAA) products, increasing fab utilization, and optimizing costs.

In 2026, the Foundry Business will focus on providing a stable supply of new 2nm GAA products and the HBM4 base-die, and beginning operations at the Company’s fab in Taylor, Texas in a timely manner.

SDC Improves Performance on Demand for Flagship Smartphones, Will Increase Large Display Sales 

Samsung Display Corporation (SDC) posted KRW 8.1 trillion in consolidated revenue and KRW 1.2 trillion in operating profit for the third quarter.

For small and medium displays, performance improved as a result of robust demand for flagship smartphones and a proactive response to new product demand from key customers. As for large displays, unit sales increased on the back of expanding demand for gaming monitors.

In Q4 2025, demand for new smartphones is expected to continue, and sales of non-smartphone display products are projected to increase, as well. SDC also aims to increase sales of large displays with the full-scale launch of products adopting the new QD-OLED monitor lineup.

In 2026, SDC will widen the smartphone technology gap by leveraging differentiated technologies tailored for AI devices and enhanced foldable product excellence, while the new 8.6G IT line will accelerate OLED expansion with competitive products.

SDC will maintain premium TV panel leadership based on superior performance and will continuously strengthen its monitor market position by expanding its lineup and diversifying its customer base.

MX Boosts Earnings on Stong Galazy Z Fold7 Launch, To Drive Sales of AI Smartphones Through Seasonal Promotions 

The Mobile eXperience (MX) and Networks Businesses posted KRW 34.1 trillion in consolidated revenue and KRW 3.6 trillion in operating profit for the third quarter.

In Q3 2025, the MX Business experienced QoQ and year-over-year (YoY) growth in sales and operating profit as a result of robust flagship smartphone sales, as well as the strong launch of Galaxy Z Fold7 and improved sales of tablets and wearables.

In Q4 2025, the Business plans to utilize seasonal promotions of AI smartphones such as Galaxy S25 and foldables — as well as ecosystem devices centered on new premium models — to achieve YoY growth.

In 2026, MX will strengthen its AI leadership with form factor innovations and expand AI smartphone sales to drive growth across all segments and strengthen its market share in terms of volume. The Business will also maintain cost efficiency via process optimization amid uncertainties and increasing material costs.

Visual Display Earnings Decline Despite Solid Sales Growth of Premium Products, Will Proactively Capture Seasonal Demand Focusing on Premium and Large-Screen TVs

The Visual Display and Digital Appliances Businesses posted KRW 13.9 trillion in consolidated revenue and KRW 0.1 trillion in operating loss in the third quarter.

In Q3 2025, the Visual Display (VD) Business achieved solid sales growth of premium products, including Neo QLED, OLED and large-screen TVs, but it saw a decline in earnings due to intensified competition.

In Q4 2025, the Business aims to achieve revenue recovery by proactively capturing seasonal demand with reinforced sales programs centered on premium and large-screen TVs.

Looking to 2026, the Business plans to strengthen leadership in the premium segment through innovative products such as Micro RGB TVs, while expanding sales in low-end to mid-range segments to drive revenue growth. Additionally, the Business will deliver differentiated customer experiences by enhancing AI functionality, and it will drive growth momentum by advancing TV Plus content and advertisements, leveraging 19 consecutive years of TV sales leadership.

The Company posted KRW 79.14 trillion in consolidated revenue, an all-time quarterly high, on the back of strong sales of flagship Galaxy S25 smartphones and high-value-added products. Operating profit increased to KRW 6.7 trillion despite headwinds for the DS Division, which experienced a decrease in quarterly revenue.

The Company has allocated its highest-ever annual R&D expenditure for 2024, and in the first quarter of this year, it has also increased its R&D expenditure by 16% compared to the same period last year, amounting to 9 trillion won.

Despite the growing macroeconomic uncertainties due to recent global trade tensions and slowing global economic growth, making it difficult to predict future performance, the Company will continue to make various efforts to secure growth. Additionally, assuming that the uncertainties are diminished, it expects its performance to improve in the second half of the year.

Semiconductors Projected To Continue Growth by Meeting Evolving AI Needs

The DS Division posted KRW 25.1 trillion in consolidated revenue and KRW 1.1 trillion in operating profit for the first quarter.

For the Memory Business, revenue was driven by expanded server DRAM sales and the addressing of additional NAND demand amid a perceived bottoming out of the market price.

However, overall earnings were impacted by the erosion of average selling price (ASP), as well as a decrease in HBM sales due to export controls on AI chips and deferred demand in anticipation of upcoming enhanced HBM3E products.

In Q2 2025, the Memory Business anticipates robust demand for AI servers and will therefore seek to strengthen our position in the high-value-added market via our server-centric portfolio, along with a ramp-up of the enhanced HBM3E 12H to meet initial demand. For NAND, the Memory Business seeks to enhance cost competitiveness by accelerating the transition to 8^th Generation V-NAND for all applications.

In H2 2025, AI-related demand is expected to remain high in conjunction with the launch of new GPUs. Therefore, the Memory Business will expand the sales of high-value-added products, including enhanced HBM3E 12H products and high density DDR5 modules of 128GB or higher.

In the mobile and PC markets, on-device AI is expected to proliferate, so the Memory Business will proactively respond to this shift in the business environment with its industry-leading 10.7Gbps LPDDR5x products.

Earnings at the System LSI Business improved modestly, due to an increased supply of high-resolution sensors and LSI products. This improvement came despite a sluggish smartphone market and the delayed adoption of the Company’s flagship system-on-a-chip (SoC).

In Q2 2025, the System LSI Business will maintain steady revenue by gaining SoC adoption by a major customer for new flagship models and capitalizing on the growing adoption of 200-megapixel sensors.

In H2 2025, the System LSI Business will expand its flagship SoC supply, proactively address demand for high-resolution main and telephoto camera sensors and expand its automotive sensor portfolio.

Earnings for the Foundry Business were muted due to sluggish seasonal mobile demand, inventory adjustments and stagnant fab utilization. However, the Business focused on the 2nm Gate-All-Around (GAA) process, improving yields and stabilizing the line while keeping the program on schedule, while also securing additional sub-5nm orders, specifically the 2nm and 4nm nodes for AI and HPC applications.

In Q2 2025, the Business will stabilize its 2nm process production and drive earnings improvement by actively addressing strong mobile and automotive demand in the United States. Looking ahead to H2 2025, the Foundry Business aims to start 2nm mass production and secure major 2nm orders and strengthen its specialty process portfolio on mature nodes.

SDC Aims To Navigate Challenges and Drive Growth With Differentiated Offerings

Samsung Display Corporation (SDC) posted KRW 5.9 trillion in consolidated revenue and KRW 0.5 trillion in operating profit for the first quarter.

For the mobile display business, SDC reported declining profits QoQ due to seasonality. The results of the large display business have improved via the launch of new QD-OLED monitor products for major clients.

In Q2 2025, the mobile display business maintains a conservative outlook on earnings while pursuing the stable supply of new products such as foldables. For the large display business, demand for gaming monitors is expected to grow due to the upcoming launches of new products.

In H2 2025, SDC aims to grow the mobile display business sales through differentiated technologies and products amid rising market uncertainties. For the large display business, SDC will strengthen its presence in both B2C and B2B monitor markets with diverse product lineups.

MX Achieves Revenue Growth, Continues To Expand AI Capabilities

The MX and Networks businesses posted KRW 37 trillion in consolidated revenue and KRW 4.3 trillion in operating profit for the first quarter.

The MX Business experienced QoQ growth in both revenue and operating profit thanks to the strong sales of its Galaxy S25 series, which features an advanced Galaxy AI experience. Enhanced cost competency and price declines for some components also contributed to solid double-digit profitability.

In Q2 2025, the MX Business plans to sustain flagship-centric sales amid weak seasonality by successfully launching the Galaxy S25 Edge. It will also expand its AI smartphone lineup through the introduction of “Awesome Intelligence” to the Galaxy A series.

In H2 2025, the MX Business will strengthen its foldable lineup by offering a differentiated AI user experience. In addition, the Business will launch new ecosystem products with enhanced AI and health capabilities, and explore new product segments such as XR.

Visual Display Posts Solid Performance, Strengthens Advanced AI Features

The Visual Display and Digital Appliances businesses posted KRW 14.5 trillion in consolidated revenue and KRW 0.3 trillion in operating profit in the first quarter.

The Visual Display Business recorded solid sales of strategic products such as Neo QLEDs, OLEDs, and large models of 75 inches and over, while price increases and material cost reductions resulted in improved QoQ profitability.

In Q2 2025, the Business intends to expand TV sales with its 2025 AI TV lineup and the integration of advanced AI functions.

In H2 2025, the Business will focus on capturing peak season demand by strategic collaboration with distributors, based on an enhanced AI TV lineup.

The Company posted KRW 79.1 trillion in consolidated revenue, an increase of 7% from the previous quarter, on the back of the launch effects of new smartphone models and increased sales of high-end memory products. Operating profit declined to KRW 9.18 trillion, largely due to one-off costs, including the provision of incentives in the Device Solutions (DS) Division.

The strength of the Korean won against the U.S. dollar resulted in a negative impact on company-wide operating profit of about KRW 0.5 trillion compared to the previous quarter.

In the fourth quarter, while memory demand for mobile and PC may encounter softness, growth in AI will keep demand at robust levels. Against this backdrop, the Company will concentrate on driving sales of High Bandwidth Memory (HBM) and high-density products. The Foundry Business aims to increase order volumes by enhancing advanced process technologies. Samsung Display Corporation (SDC) expects the demand of flagship products from major customers to continue, while maintaining a quite conservative outlook on its performance. The Device eXperience (DX) Division will continue to focus on premium products, but sales are expected to decline slightly compared to the previous quarter.

For 2025, the Company will remain focused on enhancing competitiveness in advanced technologies and strengthening leadership in premium products and AI capabilities amid ongoing macroeconomic uncertainties. The DS Division will address demand for differentiated products based on advanced technologies and high value-added products such as HBM and server SSDs. In addition, the Company plans to leverage the mass production on the 2 nanometer (nm) Gate-All-Around (GAA) process to win new clients. SDC will aim to maintain leadership in the high-end product category and broaden its product portfolio. The DX Division will continue to deliver exceptional customer experiences through enhanced AI features and product connectivity.

With over 500 million diverse products being delivered to consumers globally every year, the Company is tailoring its AI technology in each product to help lead the market. By leveraging the SmartThings platform with 360 million users and capabilities in product intelligence, spatial intelligence, and personalization, the Company plans to firmly establish itself in the home of the future, where AI will be widespread. In the AI era for the home, the Company will focus on the security of its products, convenience in device connectivity, intelligent technology to save energy and time, and the health and well-being of users and their families.

Memory Achieves Revenue Growth in Q3

The DS Division posted KRW 29.27 trillion in consolidated revenue and KRW 3.86 trillion in operating profit in the third quarter.

For the Memory Business, demand for AI and conventional servers was strong, as major datacenter and technology companies continued to invest. But mobile demand was relatively soft due to inventory adjustments by some customers, and the supply-demand situation was impacted somewhat by the increasing supply of legacy products in the China market.

The Company focused on actively responding to the demand for AI and server products while depleting aging inventories of legacy products to further improve the inventory level and mix. Therefore, compared to the previous quarter, the Company achieved significant revenue growth in HBM, DDR5 and Server SSD.

However, performance decreased due to a reduced reversal of inventory valuation loss compared to the previous quarter, one-off expenses such as the provision of incentives, and currency effects due to a weak dollar.

For the fourth quarter, the demand trends experienced in the previous quarter are expected to continue. The Company plans to accelerate the conversion of cutting-edge nodes in legacy lines and aims to strengthen its business fundamentals by completing the normalization of the inventory level and mix by the end of the year.

For DRAM, the Company plans to expand sales in line with the increase in HBM capacity, accelerate the transition to 1b nanometer[1] for server DDR5 and actively expand the sales portion of high-density modules based on 32Gb DDR5. For NAND, the Company will expand sales of 8th generation (V8) based PCIe Gen5 and plans to mass-produce the 64TB product for the quad-level cell (QLC) market, which has high growth potential.

Looking ahead to 2025, datacenter and enterprise investments are likely to remain strong in association with AI, and build demand for conventional servers, in addition to AI servers, is expected to be steadily strong.

For DRAM, the Company plans to expand the sales of HBM3E and the portion of high-end products such as DDR5 modules with 128GB density or higher for servers and LPDDR5X for mobile, PC, servers, and so on. For NAND, the Company will proactively respond to the high-density trend based on QLC products — including 64TB and 128TB SSDs — and solidify leadership in the PCIe Gen5 market by accelerating the tech migration from V6 to V8.

The System LSI Business posted modest sales growth, but earnings declined due to increased one-off costs. System-on-chip (SoC) shipments increased as flagship products were adopted for new models by a major customer. Sales of image sensors were affected by H1’s inventory accumulation, resulting in some adjustments, while display driver IC (DDI) sales expanded with new model launches by key customers.

In the fourth quarter, supply of the Exynos 2400 will continue to expand with higher customer adoption, but weak demand for image sensors is expected to continue. For DDIs, the System LSI Business is focusing on growth areas, such as the expansion of IT-oriented OLED products.

Looking ahead to 2025, the momentum of on-device AI is expected to remain strong, and the Company will focus on capturing opportunities in areas such as SoCs and cameras. The System LSI Business plans to concentrate on supplying SoCs for flagship products of a major customer while preparing for next-generation 2nm products. Image sensors will aim to maximize new product supply through HDR, low-power and zoom features, while DDIs will seek to develop low-power products using advanced processes.

The Foundry Business saw its overall earnings decline compared to the previous quarter due to the impact of one-off costs. Still, the Foundry Business successfully met its order targets — particularly in sub-5nm technologies — and released the 2nm GAA process design kit (PDK), enabling customers to proceed with their product designs.

While mobile and PC demand may remain weak in the fourth quarter, high performance computing (HPC) and AI-related demand will continue to be robust. The Foundry Business will strive to acquire customers by improving the process maturity of its 2nm GAA technology, and it will continue to develop competitive technology and design infrastructure to expand additional business opportunities.

For 2025, the overall foundry market is expected to show double-digit growth, driven by HPC and AI applications in advanced technology nodes. The Foundry Business aims to expand revenue through ongoing yield improvements in advanced technology while securing major customers through successful 2nm mass production. In addition, integrating advanced process nodes and packaging solutions to further develop the HBM buffer die is expected to help acquire new customers in the AI and HPC sectors.

Mobile Display Records Solid Results; Will Maintain Leadership in the High-End Market

SDC posted KRW 8.0 trillion in consolidated revenue and KRW 1.51 trillion in operating profit for the third quarter.

For the mobile display business, SDC achieved sequential improvements in both sales and profits thanks to the flagship product launches of major customers. For the large display business, SDC reported a slight weakening in operating profit, but sales volume improved from the previous quarter, driven by the stable demand of TV and monitor products.

In the fourth quarter, SDC expects continued demand for flagship products from major customers, and sales growth of IT and automotive products. However, SDC’s performance outlook is quite conservative compared to the previous quarter, due to headwinds from rising competition among panel makers.

For the large display business, SDC will keep striving to expand sales by meeting the fourth quarter demand of major customers through improved production efficiency, and it aims to respond to the demand for new products in 2025 with timely supply.

In 2025, SDC will continue to maintain its leadership in the foldable and high-end smartphone markets, based on innovative OLED technologies optimized for AI devices and accelerate the expansion of IT and automotive products to further diversify its business portfolio.

For the large display business, SDC will continue to leverage the performance advantage of QD-OLED panels to strengthen its position in the premium TV market. And for monitors, SDC will broaden its lineup by adding high-resolution products and diverse refresh rate options, aiming not only to solidify its competitive edge in the gaming monitor market but also to actively enter the B2C monitor market.

MX Business To Achieve Double-Digit Annual Sales Growth in Flagships

The MX and Networks businesses posted KRW 30.52 trillion in consolidated revenue and KRW 2.82 trillion in operating profit for the third quarter.

Overall market demand for smartphones grew modestly as the residual effects of global inflation slowed the recovery in consumer spending.

The MX Business recorded sequential growth in both revenue and operating profit, bolstered by the launch of new smartphone, tablet and wearable products. Sales increased — with a focus on flagship models — and profitability neared double digits, despite rising material costs as product specifications improved to boost competitiveness.

In the fourth quarter, seasonal factors are expected to lead to sequential growth in the smartphone market. At the same time, competition in the mass market segment is expected to increase as a result of rising demand, particularly in emerging markets.

The MX Business will continue to maintain solid sales of its AI smartphones, such as foldables and the S24 series, with various sales promotions in anticipation of the holiday season, aiming for annual flagship sales growth of double digits. In addition, the MX Business will expand sales linked to year-end seasonality for tablets and wearables, especially on new premium products with significantly enhanced performance, to contribute to the MX Business’ sales and profits.

In 2025, the macroeconomic environment is expected to stabilize to a degree as a result of interest rate cuts, leading to slight growth in the smartphone market. The mass market segment is expected to grow, along with demand for ecosystem products, and the smartwatch and true wireless stereo (TWS) markets will expand with broader applications of AI capabilities.

The MX Business will drive sales growth and improve profitability with a focus on flagship products, including smartphones, foldables, tablets and wearables, based on further advancements of Galaxy AI.

Visual Display To Focus on Premium Models and Service Expansion

The Visual Display and Digital Appliances businesses posted KRW 14.14 trillion in consolidated revenue and KRW 0.53 trillion in operating profit in the third quarter.

The Visual Display Business saw improved profitability both from the previous quarter and a year earlier by prioritizing sales of strategic products such as Neo QLEDs, OLEDs, and big TVs. Additionally, service business sales increased.

In the fourth quarter, overall demand in the TV market is expected to recover due to year-end peak seasonality amid intensifying competition. The Visual Display Business plans to capture peak season demand by enhancing sales programs through strategic collaborations with major retail partners, and will focus on expanding sales and securing profitability by emphasizing the competitiveness of TVs in terms of security, design, and content.

In 2025, the overall TV market is expected to post modest growth, with strategic products like QLEDs, OLEDs, and big TVs continuing to gain market share. To solidify its leading position globally, the Visual Display Business will continue to differentiate AI functionalities and innovate its products centering on premium and Lifestyle screens.

By utilizing AI, the Company aims to enhance core TV features such as picture and sound quality, while also improving the overall user experience within the SmartThings ecosystem. The Company plans to drive sales of premium products centered on Neo QLED, OLED and super big TVs, and it will maintain leadership in the Lifestyle screen category by leveraging well-established competitive advantages.

Furthermore, by capitalizing on the extensive installed base that has been established through hardware leadership, the Visual Display Business will continue to expand the service platform business through advertisement and media such as Samsung TV Plus.

[1] Refers to Samsung’s fifth-generation 10nm class DRAM

The Company posted KRW 74.07 trillion in consolidated revenue and operating profit of KRW 10.44 trillion as favorable memory market conditions drove higher average sales price (ASP), while robust sales of OLED panels also contributed to the results.

Memory Market Continues To Recover; Solid Second Half Outlook Centered on Server Demand

The DS Division posted KRW 28.56 trillion in consolidated revenue and KRW 6.45 trillion in operating profit for the second quarter.

Driven by strong demand for HBM as well as conventional DRAM and server SSDs, the memory market as a whole continued its recovery. This increased demand is a result of the continued AI investments by cloud service providers and growing demand for AI from businesses for their on-premise servers.

PC demand was relatively weak, while demand for mobile products remained solid on the back of increased orders from Chinese original equipment manufacturer (OEM) customers. Demand from server applications continued to be robust, with second quarter results improving significantly from the previous quarter as the Company responded to demand for high-value-added products for generative AI applications.

The Company strengthened its leadership in the DDR5 market through the mass production of a 128GB product based on 1b nanometer(nm)[1] 32Gb DDR5, which was developed for the first time in the industry.

In the second half of 2024, AI servers are expected to take up a larger portion of the market as major cloud service providers and enterprises expand their AI investments. As AI servers equipped with HBM also feature high content-per-box with regards to conventional DRAM and SSDs, demand is expected to remain strong across the board from HBM and DDR5 to server SSDs.

With capacity being concentrated on HBM, server DRAMs and server SSDs for AI applications, conventional bit supply of cutting-edge products for PC and mobile is expected to be constrained.

The Company plans to actively respond to the demand for high-value-added products for AI and will expand capacity to increase the portion of HBM3E sales. The Company will also focus on high-density products, such as server modules based on the 1b-nm 32Gb DDR5 in server DRAM.

For NAND, the Company plans to increase sales by strengthening the supply of triple-level cell (TLC) SSDs, which are still a majority portion of AI demand, and will address customer demand for quad-level cell (QLC) products, which are optimized for all applications, including server PC and mobile.

The System LSI Business posted record-high sales for the first half of the year as it saw earnings improve in the second quarter due to increased supply of key components such as systems on chips (SoCs), image sensors and display driver ICs (DDIs) for major flagship products.

Initial response to the new SoC for wearables, which features the industry’s first 3nm technology, has been favorable and adoption of SoCs featuring this technology by key customers is expected to expand in the second half of the year. The Company also plans to ensure a stable supply of the Exynos 2500 for flagship models.

The System LSI Business will focus on expanding the application of 200-megapixel sensors from main wide camera to tele cameras and plans to expand sales of DDI products with the start of mass production of new models for a customer based in the US.

The Foundry Business saw improved earnings as a result of increased demand across applications. Due to higher orders for sub-5nm technology, the number of AI and high-performance computing (HPC) customers increased twofold from a year earlier. The Foundry Business also distributed the process development kit (PDK) for 2nm Gate-All-Around (GAA) technology to customers ahead of mass production in 2025.

In the second half, the Foundry Business expects a rebound in mobile demand and continued high growth in demand for AI/HPC applications. As a result, the foundry market is expected to experience growth overall, particularly in advanced nodes. For 2024, on the back of full-scale mass production of second-generation 3nm GAA technology, the Company expects growth to outpace the market.

The Foundry Business plans to continue expanding orders for AI/HPC applications and aims to increase the customer number by fourfold and sales by ninefold by 2028 compared to 2023.

SDC Ready To Meet Increased Mobile Demand in H2, Targets Growth in Large Panels

SDC posted KRW 7.65 trillion in consolidated revenue and KRW 1.01 trillion in operating profit for the second quarter.

The mobile display business posted sales growth, driven by solid demand for flagship products, along with effectively supporting new smartphone launches from key customers. Timely response to customer requests with stable supply of IT OLED products also helped higher results.

In the large display business, sales of high-resolution, high-refresh-rate monitor products expanded, mostly in the gaming monitor market, while TVs maintained a stable sales in the high-end segment, driven by increased penetration of OLED panels.

In the second half of the year, the release of new smartphones from major customers and potential replacement demand with the adoption of AI is expected to lead to an increase in mobile display sales. However, competition among panel makers is likely to be more intense than in the first half.

SDC is manufacturing products with improved performance covering power consumption, brightness, slim design and durability, and will continue to expand sales and profitability through continuous quality insurance and enhanced productivity. For the large display business, SDC plans to increase sales and improve profitability by focusing on high-value-added products and introducing new monitors with various refresh rates.

MX Business To Focus on Flagship Smartphones and Ecosystem Products for Revenue Growth

The MX and Networks businesses posted KRW 27.38 trillion in consolidated revenue and KRW 2.23 trillion in operating profit for the second quarter.

Overall market demand for smartphones declined sequentially, particularly in the premium segment, as seasonal trends continued in the smartphone market. While the MX Business recorded a sequential decline in revenue, the Galaxy S24 series achieved double-digit year-on-year growth in both shipments and revenue over its predecessor for both the second quarter and the first half of the year, demonstrating the continued success of the series.

Profitability declined slightly compared to the previous quarter, primarily due to increased costs stemming from the rising prices of essential components. Nevertheless, the MX Business recorded double-digit profitability for the entire first half of the year.

In the second half of 2024, overall demand for smartphones is expected to increase year-on-year, with increased demand for premium products being driven by growing demand for AI and the launch of new products with innovative features. In addition, market demand for ecosystem products such as tablets, smartwatches and smart rings is expected to increase. Accordingly, the MX Business expects smartphone shipments to increase in the third quarter, while tablet shipments are expected to sequentially remain consistent.

The MX Business will seek revenue growth by expanding sales of flagship smartphones and ecosystem products, while also continuing to ensure solid profitability by optimizing product specifications, including component standardization and pursuing operational efficiencies.

Visual Displays Business To Lead Growth in TV Market by Promoting Unique Competitiveness

The Visual Display and Digital Appliances businesses posted KRW 14.42 trillion in consolidated revenue and KRW 0.49 trillion in operating profit in the second quarter.

Overall TV market demand saw a year-on-year increase — primarily in advanced countries — as well as a quarter-on-quarter increase mainly due to global sporting events. Backed by differentiated launches of new TV models in 2024, the Visual Display Business solidified its leadership in the premium market by focusing on selling strategic products, such as Neo QLED, OLED and Lifestyle screens. However, profitability decreased year-on-year as costs increased, due to higher panel prices and intensified market competition.

In the second half of 2024, overall market demand is expected to recover further due to growing demand for QLED, OLED and larger screen TVs. The Visual Display Business will capitalize on peak season demand by implementing sales programs centered around premium and large-size TVs. Moreover, it will promote competitive features like AI, security and design along with differentiated customer experiences enabled by Samsung SmartThings.

Additionally, the Visual Display Business will seek to reinforce its growth momentum by strengthening its service businesses.

[1] Refers to Samsung’s fifth-generation 10nm class DRAM

The Company posted KRW 71.92 trillion in consolidated revenue on the back of strong sales of flagship Galaxy S24 smartphones and higher prices for memory semiconductors. Operating profit increased to KRW 6.61 trillion as the Memory Business returned to profit by addressing demand for high value-added products. The Mobile eXperience (MX) Business posted higher earnings and the Visual Display and Digital Appliances businesses also recorded increased profitability.

The weakness of the Korean won against major currencies resulted in a positive impact on company-wide operating profit of about KRW 0.3 trillion compared to the previous quarter.

The Company’s total capital expenditures in the first quarter stood at KRW 11.3 trillion, including KRW 9.7 trillion for the Device Solutions (DS) Division and KRW 1.1 trillion on Samsung Display Corporation (SDC). Spending on memory was focused on facilities and packaging technologies to address demand for High Bandwidth Memory (HBM), DDR5 and other advanced products, while foundry investments were concentrated on establishing infrastructure to meet medium- to long-term demand. Display investments were mainly made in IT OLED products and flexible display technologies.

Memory Business Returns to Profit; Second Quarter Expected to Remain Solid on AI Demand

The DS Division posted KRW 23.14 trillion in consolidated revenue and KRW 1.91 trillion in operating profit for the first quarter.

For servers and storage, demand for generative AI showed solid trends, while demand for DDR5 and high-density SSDs remained strong. For PCs and mobile overall, content-per-box continued to grow for both DRAM and NAND, and demand remained robust on the back of active sell-in driven primarily by Chinese mobile OEM customers.

The Memory Business returned to profit as it achieved qualitative growth by addressing the demand across servers, storage, PC and mobile, focusing on high-value-added products such as HBM, DDR5, server SSDs and UFS 4.0., along with the increase in ASP.

Looking ahead to the second quarter, the industry is expected to remain solid, led mainly by demand for generative AI.

For servers and storage, the continuous increase in the supply of AI servers and subsequent expansion of associated cloud services will increase demand not only for HBM but also for conventional servers and storage solutions. Demand for mobile is expected to be stable in the quarter, while PC customers are predicted to be affected by slow seasonality, making them likely to adjust their inventories ahead of new product launches in the second half of the year.

The Company started mass production of HBM3E 8H this month and plans to mass produce HBM3E 12H products and a 128GB product based on 1b nanometer[1] (nm) 32Gb DDR5 within the second quarter. The Company also started mass production of V9 NAND for the first time in the industry this month.

In the second half of 2024, business conditions are expected to remain positive with demand — mainly around generative AI — holding strong, despite continued volatility relating to macroeconomic trends and geopolitical issues.

For HBM, the Company will continue to increase supply in order to respond to growing demand for generative AI. In DRAM, the Company plans to accelerate 1b nanometer-based 32Gb DDR5 supply with faster ramp-up speeds and further strengthen its competitiveness in the high-density DDR5 module market. For NAND, the Company plans to enhance technology leadership by mass producing quad-level cell (QLC) for V9 in the third quarter.

The System LSI Business increased the supply of systems on chips (SoCs) and sensors for major customers’ new products, but earnings improvements have taken longer than anticipated as Display Driver IC[2] (DDI) sales were impacted by slowing panel demand.

With smartphone sell-out likely to show signs of recovery after a slow start, the System LSI Business will focus on providing a stable supply of flagship SoCs and sensors and is also preparing to ship products based on advanced technologies for new wearables.

For mobile sensors, the utilization rate is expected to remain high, including the mass production of 50MP products for global customers. For DDIs, sales are expected to continue expanding to meet demand from a major customer for new IT/TV products.

Amid a likely intensified pressure for component pricing, the System LSI Business will proactively adjust its product mix to navigate these challenges effectively.

The Foundry Business saw a delay in sales improvement due to weak market demand and continued inventory adjustments. Still, efficiency efforts in fab operations became more visible, which allowed it to narrow losses slightly.

The development of advanced 3nm and 2nm technologies is progressing smoothly, and 4nm technology yields have stabilized. This improvement in advanced technology competitiveness helped the Foundry Business achieve its highest ever order backlog in the first quarter.

Amid a likely gradual recovery in market conditions, second-quarter revenue is expected to rebound and reach double-digit quarter-on-quarter growth after bottoming in the first quarter.

The Foundry Business plans to complete the development of 2nm design infrastructure and prepare 4nm technology applicable to 3D IC. For mature technologies like 14nm and 8nm, it plans to prepare infrastructure for multiple applications.

In the second half of 2024, the foundry market is expected to see limited growth as uncertainties are likely to persist. However, the Foundry Business expects to outpace the market growth rate in annual sales thanks to increased sales of leading-edge technologies of 5nm and below. It will start mass production of Gate-All-Around (GAA) 3nm second-generation technology and improve the maturity of 2nm technology to focus on high-growth applications like AI and high-performance computing (HPC).

SDC To Focus on Flexible Displays and IT/Automotive, Aims for Sales Growth in Large Panels

SDC posted KRW 5.39 trillion in consolidated revenue and KRW 0.34 trillion in operating profit for the first quarter.

In the mobile display business, while intensifying competition led to a decline in earnings from the previous quarter, SDC ensured the timely supply of flexible displays for a major customer’s high-end smartphones and improved the utilization rate for rigid displays.

For the large display business, SDC narrowed losses on the back of new QD-OLED monitor products and a stronger customer base, despite an ongoing curb in demand.

While SDC expects sales to increase in mobile displays with the launch of new foldable phones from a major customer and stronger demand for IT products in the second quarter, earnings growth is likely to be impacted by intensifying competition.

As for large displays, SDC plans to address demand for TV panels for a major customer and seeks to expand sales of premium monitors.

In the second half of the year, SDC will focus on maintaining competitiveness by expanding the sales of flexible displays with low power consumption and improved durability while also continuing to replace LCD displays in smartphones with rigid display products. Furthermore, SDC plans to boost its IT and automotive businesses in order to diversify its business portfolio.

SDC aims to increase large display sales from the previous year by improving the production efficiency of QD-OLED displays and enhancing the product mix, focusing on high-valued-added offerings.

MX Business Posts Revenue Growth Amid Market Decline, Plans Continued Investment in AI

The MX and Networks businesses posted KRW 33.53 trillion in consolidated revenue and KRW 3.51 trillion in operating profit for the first quarter.

Market demand for premium and mid-range smartphone segments decreased sequentially in volume and value as the smartphone market entered the seasonally slower first quarter.

However, the MX Business achieved revenue and operating profit growth due to strong sales of the Galaxy S24 series and maintained solid double-digit profitability through continued efforts in resource optimization. In particular, Galaxy AI features on the S24, such as Circle to Search, continued to see high usage rates and contributed to sales growth.

In the second quarter, overall demand for smartphones is expected to decline sequentially due to seasonality. Accordingly, the MX Business expects smartphone shipments to decline and tablet shipments to remain consistent sequentially.

The MX Business will maintain its flagship-oriented sales approach in the second quarter by applying the Galaxy S24’s AI experience to other flagship models and maximizing product competitiveness. Additionally, the MX Business will aim to secure solid profitability by continuing to streamline operations in light of continued geopolitical instability and likely increases in the cost of key components. At the same time, the MX Business will remain committed to investing in R&D, including in AI, despite a challenging environment.

In the second half of the year, the smartphone market is expected to rebound due to stabilizing consumer sentiment, the expansion of AI products and services and economic growth in emerging markets.

The MX Business will seek annual growth in smartphone sales and aims to maintain sales momentum through the expansion of Galaxy AI to existing and new flagship products across foldable devices and tablets. For wearables, it will strengthen the Galaxy ecosystem experience through the expansion of new models and form factors like the Galaxy Ring. For smartwatches, the MX Business will strive to meet demand for upgrades through the launch of new premium models.

Additionally, the MX Business will continue to seek operational efficiencies to counter rising component costs to ensure solid annual profitability, and it will continue to invest in research and development to further expand and refine Galaxy AI.

Visual Display and Digital Appliances To Continue Breaking New Ground in the AI Era

The Visual Display and Digital Appliances businesses posted KRW 13.48 trillion in consolidated revenue and KRW 0.53 trillion in operating profit in the first quarter.

The Visual Display Business posted higher quarter-on-quarter profitability even as the overall market demand decreased by concentrating on premium products, such as Neo QLEDs, OLEDs and TVs above 75″. However, profitability declined year-on-year due to stagnant TV market demand and increased costs amid intensifying market competition.

In the second quarter, overall market demand is expected to remain weak due to declining TV demand in emerging markets, but major global sporting events may lead to opportunities to increase sales. The Visual Display Business will focus on securing profitability, enhancing sales of strategic products and strengthening operations management in each business segment.

In the second half of 2024, overall TV demand is expected to recover gradually amid an uncertain macroeconomic and geopolitical environment. The Visual Display Business will address diverse consumer needs while promoting “AI Screen Leadership,” driven by innovative premium TVs and Lifestyle screens. Additionally, it will provide differentiated customer experiences through connected devices and drive market growth by promoting advanced features based on security and sustainability, as well as boosting competitiveness in service businesses such as Samsung TV Plus.

[1] Refers to Samsung’s fifth-generation 10nm class DRAM.

[2] Integrated circuit.

Total consolidated revenue was KRW 67.40 trillion, a 12% increase from the previous quarter, mainly due to new smartphone releases and higher sales of premium display products. Operating profit rose sequentially to KRW 2.43 trillion based on strong sales of flagship models in mobile and strong demand for displays, as losses at the Device Solutions (DS) Division narrowed.

The Memory Business reduced losses sequentially as sales of high valued-added products and average selling prices somewhat increased. Earnings in system semiconductors were impacted by a delay in demand recovery for major applications, but the Foundry Business posted a new quarterly high for new backlog from design wins.

The mobile panel business reported a significant increase in earnings on the back of new flagship model releases by major customers, while the large panel business narrowed losses in the quarter.

The Device eXperience (DX) Division achieved solid results due to robust sales of premium smartphones and TVs. Revenue at the Networks Business declined in major overseas markets as mobile operators scaled back investments.

Harman posted a quarterly record in operating profit, led by higher sales of car audio products amid an overall increase in orders from automotive customers and also consumer audio products such as portable speakers.

In the fourth quarter, the DS Division will focus on sales of high value-added products such as High Bandwidth Memory (HBM) while also strengthening its technological leadership. Both the DX Division and Samsung Display Corporation (SDC) will seek to maintain solid profitability by focusing on premium markets.

The Memory Business plans to expand sales of HBM3 products and will address growing demand for new interfaces while increasing the portion of advanced nodes. System semiconductors are expected to post improved results on the back of new products for mobile customers.

SDC expects to maintain strong performance in the mobile panel business, driven by robust demand for premium OLED panels for smartphones. The large panel business will expand QD-OLED sales, led by year-end seasonal demand.

The DX Division will strive to maintain solid profitability by reinforcing strategies for flagship smartphones and expanding sales of premium tablets and wearable products. For TVs, the Company expects solid seasonal demand for high value-added models. The Networks Business will seek to secure new orders in overseas markets, while the Digital Appliances Business will focus on sales of premium products and strengthening the product mix.

Harman will seek to post another robust quarter by expanding sales of audio products during end-year seasonality as well as addressing the continuing demand for automotive products.

In 2024, while macroeconomic uncertainties are likely to persist, memory market conditions are expected to recover. The DS Division will seek to expand sales of advanced node products and plans to meet demand for high-performance, high-bandwidth products by increasing sales of HBM3 and HBM3E with the industry-leading HBM production capacity in the industry. For the Foundry Business, the second generation 3-nanometer (nm) Gate-All-Around (GAA) process will start mass production and operations will begin at its new factory in Taylor, Texas. Furthermore, in the Advanced Package business, production will begin, based on the multiple orders it has received from domestic and overseas HPC customers, including orders for the Company’s turnkey service that combines logic, HBM and 2.5D advanced packaging technologies.

For SDC, the mobile panel business plans to meet increasing demand for new applications, while the large panel business will improve profitability by adding new products and enhancing yields.

The DX Division will focus on the premium market by increasing sales of flagship smartphone models and innovative TV products. The Company plans to expand the application of AI, provide tailored hyper-connected experiences via SmartThings and secure technologies in new areas such as XR. The Networks Business will aim to increase revenue by seeking business opportunities overseas and reinforcing technology leadership in core 5G chips and virtualized Radio Access Network (vRAN) solutions.

The Digital Appliances Business plans to strengthen the leadership in premium segments with global launches of appliances featuring AI technology. The Company plans to continue advancing the connectivity experience between SmartThings-based digital appliances and other devices.

Harman is expected to secure orders in new areas including automotive displays and will address demand for high-growth products such as home audio equipment.

In the third quarter, Samsung Electronics’ capital expenditure reached KRW 11.4 trillion, including KRW 10.2 trillion spent in the Device Solutions (DS) Division and KRW 0.7 trillion in Samsung Display Corporation (SDC). The cumulative total for the January-September period is KRW 36.7 trillion, with KRW 33.4 trillion allocated to the DS Division and KRW 1.6 trillion to SDC.

The full-year capital expenditure for 2023 is expected at approximately KRW 53.7 trillion, including KRW 47.5 trillion allocated to the DS Division and KRW 3.1 trillion to SDC.

Spending on memory is expected to be concentrated in Pyeongtaek, which includes completing the P3 infrastructure and progressing the P4 framework for mid- to long-term supply. The Company remains committed to investing in new technologies, such as securing industry-leading HBM production capacity. Foundry investments are expected to increase from last year, centering on production capacity expansion in Pyeongtaek for the EUV process as well as for infrastructure investment in Taylor. For SDC, investments will mainly focus on expanding capacity for flexible displays and OLED products for IT applications.

Foundry Achieves Record Backlog From Design Wins; Memory Demand To Recover in 2024

The DS Division posted KRW 16.44 trillion in consolidated revenue and KRW 3.75 trillion in operating losses in the third quarter.

For the Memory Business, the PC and mobile demand improved by increasing adoption of high-density products in both DRAM and NAND and the completion of customers’ inventory adjustments. The server demand for generative AI-oriented, high-density and high-end products remained strong in comparison to the sluggish demand for conventional servers.

With a focus on improving profitability, the Memory Business continued to expand sales of advanced-node products such as HBM, DDR5, LPDDR5x and UFS 4.0, and it also strived to reduce inventory levels by production adjustment rather than by aggressive sales expansion.

Overall, bit growth came in under guidance but the average selling price (ASP) of both DRAM and NAND saw some decent increases when compared to the previous quarter.

Looking to the fourth quarter, thanks to effects of peak seasonality including year-end promotions and launches of new smartphones by major mobile customers, the demand for PCs and mobile is likely to improve. Additionally, the trend of high-density penetration for both PCs and mobile devices has been accelerating more than forecasted. Cloud service providers’ capital expenditure is concentrated on generative AI, so the associated server demand is expected to remain strong.

The Memory Business will expand the sales portion of highly profitable automotive products and HBM3 mass-volume business for major customers, in line with growing demand for generative AI. Through the ramp-up of Pyeongtaek Line 3, Samsung will proactively address the rising demand for new interfaces such as DDR5, LPDDR5x, PCIe Gen5 and UFS 4.0.

Looking ahead to 2024, PC and mobile demand is likely to benefit from the arrival of some replacement cycles for products sold during the initial phase of the pandemic. For DRAM, due to the spread of On-Device AI, the high-density trend in the flagship and high-end segments is expected to continue.

Overall memory demand is expected to recover gradually thanks to increasing demand for AI and normalizing inventory levels at customers, but various factors that can affect the server market — such as geopolitical issues and IT spending trends that are related to macroeconomic conditions and centered on generative AI — need to be continuously monitored.

In the third quarter, the System LSI Business posted a slower than expected improvement in earnings due to a delayed recovery in semiconductor demand and the impact from inventory adjustments.

During the quarter, the development of E2400 was completed, which has significantly improved performance for the CPU, GPU and NPU when compared to its predecessor. In addition, the Mobile Display Driver IC (DDI) achieved the highest quarterly sales this year on the back of a new product launched by customers, while the 200-megapixel image sensor has expanded the application from wide-angle cameras to telephoto cameras.

In the fourth quarter, the System LSI Business expects earnings to improve significantly, as supply to mobile customer’s new products is predicted to increase. The mobile SoC is in the final stages of development for next year’s flagship smartphones and is poised to expand the business portfolio by targeting global customers for the modem business, while also enhancing the solution capabilities for On-Device AI.

In 2024, as the mobile market is expected to pursue sales growth by increasing the portion of premium models, the System LSI Business will also seek growth by increasing sales of flagship products and expanding the business area beyond the mobile market.

Earnings at the Foundry Business remained weak as a slow recovery in major applications including mobile led to a delay in fab utilization rate improvement. However, the Foundry Business did achieve a quarterly record backlog for new design wins, centering on HPC applications.

In the fourth quarter, earnings are expected to improve as demand for semiconductors will likely increase with the launch of new products by major customers. The Foundry Business is stabilizing the GAA processes by continuously improving the yield of the second-generation 3nm process, and it also plans to secure a design infrastructure that reflects the Silicon results for 2nm.

Looking ahead to 2024, the foundry market is expected to return to a state of growth with the recovery in mobile demand and continuing increase in HPC demand. The Foundry Business plans to mass produce the second-generation 3nm process and the fourth-generation 4nm process for HPC applications. It will also strengthen the overall product portfolio by focusing on the development of specialty processes such as RF and eMRAM to expand into various applications such as HPC, automotive and consumer applications.

Mobile Display Posts Solid Results, Will Continue Focus on High-End Market

SDC posted KRW 8.22 trillion in consolidated revenue and KRW 1.94 trillion in operating profit for the third quarter.

For the mobile display business, SDC saw a slight increase quarter-on-quarter in market demand on the back of seasonal demand and launches of new products by major smartphone makers. SDC achieved solid results by focusing on premium OLED, with the polarizing trend intensifying between high-end and mid-range-and-below markets.

For the large display business, SDC saw earnings improve from the previous quarter as it concentrated on high-end products while strengthening operational fundamentals resulted in enhanced yields and reduced losses.

In the fourth quarter, SDC expects sales in the mobile display business to remain relatively strong thanks to seasonal effects in the smartphone and IT markets. However, growth may be limited as lingering inflation and rising interest rates impact consumer sentiment. SDC will strive to generate similar results quarter-on-quarter by leveraging competitiveness in the high-end market and featuring launches of new foldable products.

For the large display business, despite concerns over prolonged tepid demand due to the economic downturn, SDC will continue its efforts to reduce losses with an enhanced product mix including an increased share of monitors.

In 2024, in spite of persistent and adverse macro factors, SDC will seek to secure robust results by utilizing its wide capabilities, including preemptive investments, development of differentiated technologies and effective management to ensure stable quality and yield.

Furthermore, as its strategic customers are releasing new products featuring OLED in the foldable smartphone, IT OLED, automotive and gaming segments, SDC will actively promote OLED’s unique selling points and create a turning point in the market.

In particular, SDC will maintain its industry leadership by developing not only technology that caters to customer needs, but also a complete supply chain — both upstream and downstream — in the high-potential AR/VR markets.

Mobile Achieves Double-Digit Profit, Will Leverage Holiday Season in Q4

The MX and Networks businesses posted KRW 30.00 trillion in consolidated revenue and KRW 3.30 trillion in operating profit for the third quarter.

Overall market demand increased from the previous quarter, driven by a recovery in the global smartphone market. The sales and profitability of the MX Business increased quarter-on-quarter, driven by the successful launch of new flagship models. New foldable devices, tablets and wearables recorded strong sales, supported by a stable supply, and the Galaxy S23 series, launched in the first half of 2023, also maintained solid sales momentum.

In the fourth quarter, due to seasonality, the smartphone market is expected to grow and experience intensified competition, especially in the premium segment. Competition is also expected to increase in the mass-market segment, while market uncertainties are expected to remain due to ongoing geopolitical instability.

The MX Business will continue to maintain steady sales of its new foldable products and the Galaxy S23 series with various sales promotions in anticipation of the year-end holiday season. For tablets and wearables, the MX Business will expand sales with a focus on new premium products, leveraging seasonality and strengthening marketing campaigns in close collaboration with partners.

In 2024, smartphone market demand is expected to rebound as consumer sentiment stabilizes in anticipation of a global economic recovery, and growth in the premium segment is expected to continue. The premium segment of the tablet market is also expected to grow, while the smartwatch market is forecasted to achieve double-digit growth, with the True Wireless Stereo market set to grow modestly.

The MX Business will focus on further enhancing the smartphone experience for customers, seeking double-digit growth in annual flagship shipments and above-market smartphone revenue growth. For tablets, an emphasis will be placed on strengthening the premium product lineup, while for wearables, priority will be on expanding sales of new models and enhancing wellness features.

Moreover, the MX Business will advance generative AI technology in core features to deliver hyper-personalized experiences, as well as acquire technologies in future growth areas such as XR, Digital Health and Digital Wallet.

Through these efforts, the MX Business aims to achieve annual growth in revenue and profit in 2024 while optimizing resources to adapt to unstable market changes and improve profitability.

Visual Display and Digital Appliances To Focus on Securing Profitability

The Visual Display and Digital Appliances businesses posted KRW 13.71 trillion in consolidated revenue and KRW 0.38 trillion in operating profit in the third quarter.

Overall market demand for TVs increased quarter-on-quarter in the third quarter, led by seasonality, but declined year-on-year due to various macroeconomic factors affecting consumer demand.

The Visual Display Business improved year-on-year profitability as it expanded its leadership in the premium market to focus on selling high-value-added products — including Neo QLEDs, OLEDs and Super Big TVs — while reducing overall costs, especially material costs.

In the fourth quarter, demand uncertainty is expected to remain unresolved due to various risks in the business environment, apart from the premium market, where solid demand is projected.

The Visual Display Business will ensure the capture of peak-season demand by enhancing its competitiveness in both online and offline channels. In addition, it aims to secure profitability by improving its high-value-added product mix with Neo QLEDs, Lifestyle Screens and Super Big TVs.

In 2024, the TV market may fluctuate due to the external risks that were also present in 2023. However, consumer sentiment is expected to turn around from this year and slightly improve to alleviate the decline in market demand.

The Visual Display Business will continue to innovate TV products, focusing on premium and lifestyle screens, to lead the ultra-high-definition and ultra-large size TV market — especially targeting demand associated with major sports events scheduled in 2024.

The Visual Display Business will continue to center on the fundamentals of TV, including picture and sound quality, as well as other features that are highly valued in the market, to allow customers to enjoy differentiated screen experiences.

The Company posted KRW 60.01 trillion in consolidated revenue, a 6% decline from the previous quarter, mainly due to a decline in smartphone shipments despite a slight recovery in revenue of the DS (Device Solutions) Division. Operating profit rose sequentially to KRW 0.67 trillion as the DS Division posted a narrower loss, while Samsung Display Corporation (SDC) and the Digital Appliances Business saw improved profitability.

The Memory Business saw results improve from the previous quarter as its focus on High Bandwidth Memory (HBM) and DDR5 products in anticipation of robust demand for AI applications led to higher-than-guided DRAM shipments. System semiconductors posted a decline in profit due to lower utilization rates on weak demand from major applications.

In the mobile panel business, earnings were similar to the previous quarter on the back of solid sales of premium panels, while the large panel business continued to focus on QD-OLEDs in the premium market.

The Device eXperience (DX) Division achieved strong profitability due to higher sales of premium TVs and digital appliances, an improved cost structure and increased operational efficiency. The Networks Business’s revenue declined in major overseas markets including North America and Japan.

Harman posted revenue and profit growth, led by demand for consumer audio such as portable and True Wireless Stereo products. Harman also won the largest automotive order in its history in the quarter.

The weakness of the Korean won against the US dollar, euro and major emerging currencies resulted in a positive impact on company-wide operating profit.

Global demand is expected to gradually recover in the second half of the year which should lead to an improvement in earnings driven by the component business. However, continued macroeconomic risks could prove to be a challenge in such recovery in demand.

The DS Division will focus on sales of high-value-added products such as DDR5, LPDDR5x and HBM amid expectations of a recovery in demand. It will continue to strengthen mid- to long-term competitiveness by increasing investments in infrastructure, R&D and packaging technology, while also enhancing the completeness of the Gate-All-Around (GAA) process.

SDC’s mobile panel business is expected to post improved earnings as major customers launch new smartphone models, while the large panel business will address year-end seasonal demand with a supply of ultra-large panels.

The DX Division plans to sustain solid profitability with new foldable smartphone and wearable launches and by increasing sales of premium TVs and digital appliances. The Networks Business aims to win new projects to grow revenue and reinforce technology leadership in 5G core chips and software-based virtualized Radio Access Networks (vRAN).

The Digital Appliances Business plans to expand the Bespoke lineup globally and increase sales of energy-efficient products featuring the Energy Savings Mode on SmartThings, while Harman is expected to improve profitability with higher sales of consumer audio products.

The Company’s total capital expenditures in the second quarter stood at KRW 14.5 trillion, including KRW 13.5 trillion for semiconductors and KRW 0.6 trillion for displays. Spending on memory was concentrated on completing the P3 infrastructure and the P4 framework for mid- to long-term supply. Foundry investments continued to focus on fabs in Taylor, Texas and Pyeongtaek, Korea to address the demand for advanced nodes, while investments in displays focused on infrastructure and module production enhancements.

Memory Business To See Improved Growth amid Stabilizing Market

The DS Division posted KRW 14.73 trillion in consolidated revenue and KRW 4.36 trillion in operating losses for the second quarter.

The Memory Business achieved its bit growth guidance even as it saw more limited price drops for both DRAM and NAND, which ultimately contributed to a quarter-on-quarter improvement in performance. As server customers continued inventory adjustment, overall purchase demand had not yet recovered. Due to the strong demand for generative AI, however, investment from the data center sector was concentrated on AI servers.

For DRAM, the Memory Business exceeded bit growth guidance by expanding sales on applications of consumer, graphics and automotive in addition to expanding sales focusing on servers, especially by actively responding to rising demand for DDR5 and HBM for generative AI applications.

As for NAND, the Memory Business actively responded to the demand for flagship smartphones with competitiveness in UFS 4.0 and also achieved bit growth guidance by increasing sales of gaming devices, branded products for retail and so on. Meanwhile, the price decline was considerably less than the previous quarter.

Looking to the second half of the year, the market is expected to gradually move toward stability considering increasing production cuts in the industry, while inventory adjustments by customers are likely to wind down.

In mobile and PC applications, with the normalization of major customers’ set inventory levels, Set-Build demand is expected to improve due to the launch of new smartphones and PC promotion in the second half of the year.

The server demand is expected to recover gradually and, in terms of products, demand for DDR4 and DDR5 is also expected to improve.

Based on supply flexibility linked to market conditions, the Memory Business will optimize its portfolio by focusing on high value-added and high-density products. In DRAM, to strengthen leadership in high-performance servers and mobile high-end segments, the Memory Business will rapidly increase the share of leading-edge products such as DDR5, LPDDR5x and HBM.

In the second quarter, the System LSI Business posted a lower-than-expected improvement in its earnings due to the delayed recovery of demand for semiconductors and customers’ continued inventory adjustments.

However, the System LSI Business won a design award for automotive SoCs with a domestic OEM for their 2025 premium model, and it also continued efforts to expand SoC applications including actively discussing mid- to long-term cooperation with European customers.

The System LSI Business expanded its applications to fingerprint authentication cards in the security business as well as Battery Management Systems (BMS) in the power management IC business.

In the second half of 2023, the recovery of demand for major applications such as mobile is likely to be delayed due to depressed consumer sentiment and lower-than-expected reopening efforts in China.

The System LSI Business is also seeking to resume supplying major customers by securing product performance for the flagship model and new business solutions aside from smartphones. For automotive SoC, it will continue focusing on winning orders from European OEMs in 2026.

The Foundry Business saw its revenue increase quarter-on-quarter in the second quarter thanks to increased sales to some US customers, but operating profit declined significantly as utilization decreased due to fab expansion and uncertainties in short-term demand.

The Foundry Business is smoothly mass producing its third product using GAA technology thanks to the stabilization of the 3-nanometer (nm) process, and the development of both the second generation of 3nm GAA technology and the 2nm GAA technology is on track and progressing well.

The Foundry Business successfully held the SFF/SAFE 2023 event in the US and Korea, introducing its process roadmap and various technological innovations. It launched the Multi-Die Integration Alliance with ecosystem partners.

In the second half of the year, although there are still considerable uncertainties, it expects demand to improve gradually.

The Foundry Business will lay the foundation for growth by advancing the development completeness of the 3nm GAA process with improved Power, Performance and Area (PPA) and by expanding orders from large customers.

It will keep striving to grow its product portfolio by continually developing mature processes, such as 8nm eMRAM, as well as 8-inch technologies for use in automotive applications.

SDC To Leverage New Technology To Build on Earnings

SDC posted KRW 6.48 trillion in consolidated revenue and KRW 0.84 trillion in operating profit for the second quarter.

For mobile panels, SDC achieved results similar to the previous quarter’s and thus maintained its market share by supplying OLED panels equipped with outstanding performance and technology.

For the large panel business, SDC has been improving its business fundamentals with enhanced yield and productivity, and it is also strengthening the premium position of its QD-OLED products with the product mix upgrade centered on ultra-large 77-inch TVs.

In the second half of the year, since SDC has several of its mobile panel customers due to release new products, it expects to see earnings improve. In particular, using its accumulated technological prowess in new areas such as HIAA and HOP, SDC aims to stay ahead of its competitors and seamlessly accommodate the mass production of new products from the customers.

For large panels, uncertainty over demand is likely to persist in the second half. SDC will collaborate with its customers to boost sales of ultra-large TVs, which are performing well. In addition, SDC acquired eMagin, a microdisplay manufacturer, in May. SDC will actively develop technology to lead the Extended Reality (XR) display market, which is expected to grow rapidly.

Mobile To Focus on New Foldable and Galaxy Ecosystem Devices in 2H

The Mobile eXperience (MX) and Networks businesses posted KRW 25.55 trillion in consolidated revenue and KRW 3.04 trillion in operating profit for the second quarter.

Overall market demand declined from the previous quarter due to continued macroeconomic factors, including high interest rates and inflation.

Sales decreased sequentially for the MX Business as the effect of the Galaxy S23 launch from Q1 faded. Mass market recovery was also delayed due to the continued economic downturn, affecting Q2 sales.

Nevertheless, the Galaxy S23 series was able to achieve higher results than its predecessor in the first half, in terms of both volume and value.

The MX Business’s efforts to optimize operational efficiencies throughout R&D, manufacturing, and logistics, underpinned by stabilized prices of major raw materials, led it to maintain a double-digit margin.

For the second half of 2023, the overall smartphone market is expected to return to year-on-year growth, especially in the premium market.

However, external forecasts for market growth have also been lowered, amid risks of a prolonged global economic downturn.

Regarding tablets, the overall market is expected to stay mostly flat, but the high-end segment is projected to increase.

The MX Business will focus on the newly launched Galaxy Z Flip 5 and Galaxy Z Fold 5 series — which feature refined and differentiated user experiences – further fortifying its leadership in the global foldable smartphone market.

For the Galaxy S23 and Galaxy A series, the MX Business plans to enhance sales through close collaboration with its partners and sales programs tailored by region.

The MX Business will also focus on boosting sales of its tablets and wearables, with a strong focus on its new high-end models, which were announced this week at the Galaxy Unpacked event.

Through such activities and initiatives, the MX Business intends to grow its annual revenue in 2023, while securing sold double-digit profitability through enhanced operational efficiency.

Visual Display and Digital Appliances To Maintain Robust Performance in 2H

The Visual Display and Digital Appliances businesses recorded KRW 14.39 trillion in consolidated revenue and KRW 0.74 trillion in operating profit for the second quarter.

Demand for TVs declined quarter-on-quarter due to seasonal spending trends, but the decrease in demand started to ease in comparison to the previous year. The Visual Display Business posted higher results year-on-year by focusing on sales of high-value-added products, such as Neo QLED/OLED/ultra-large TVs, and reducing overall costs.

In the second half of 2023, the Visual Display Business expects seasonal strength to ease the decline in overall TV demand amid continued uncertainties in the business environment, while the premium market is projected to remain robust.

The Visual Display Business will continue leading the industry through innovative products including 98-inch ultra-large screens, Micro LED lineups and the world’s first large-sized OLED gaming monitor and also through differentiated marketing related to areas highly valued by its consumers, such as the environment, security and content. Furthermore, it will leverage seasonal sales opportunities through compelling sales promotion strategies focusing on key products, including Neo QLED, OLED and Lifestyle.

The Company posted KRW 70.46 trillion in consolidated revenue and KRW 4.31 trillion in operating profit in the quarter ended December 31, 2022. For the full year, it reported 302.23 trillion in annual revenue, a record high and KRW 43.38 trillion in operating profit.

The business environment deteriorated significantly in the fourth quarter due to weak demand amid a global economic slowdown. Earnings at the Memory Business decreased sharply as prices fell and customers continued to adjust inventory. The System LSI Business also saw a decline in earnings as sales of key products were weighed down by inventory adjustments in the industry. The Foundry Business posted a new record for quarterly revenue while profit increased year-on-year on the back of advanced node capacity expansion as well as customer base and application area diversification.

Samsung Display Corporation (SDC) saw earnings in the mobile panel business decline as smartphone demand fell while the large panel business narrowed its losses as sales of QD-OLED for TVs increased and as the business’s LCD inventory was fully depleted.

Revenue and profit at the Mobile eXperience (MX) Business declined amid weak demand in the mid- to low-end segments while the Networks Business posted an increase in revenue led by domestic demand for 5G installations and expansion in overseas businesses.

The Visual Display Business posted higher revenue and operating profit as sales of premium products, including Neo QLED and Super Big TVs, increased, while the Digital Appliances Business saw a profit decline because of cost increase due to deteriorated market conditions and as competition intensified.

The strength in the US dollar against the Korean won resulted in a positive impact of approximately KRW 0.5 trillion company-wide on operating profit compared to the previous quarter.

The recent change in Korean tax law which revised taxation on dividends received from subsidiaries led to a decline in the Company’s corporate tax in the fourth quarter.

The one-time item due to the tax law change was reflected in the quarter’s financial statements and does not mean the Company received a corporate tax refund, nor is it related to the Company’s actual tax payment.

In the first quarter, the semiconductor business will focus on actively addressing the demand for high-end products, such as DDR5, LPDDR5x and 200 megapixel (MP) image sensors, amid a weak memory market and soft global IT demand. SDC plans to meet the demand for major customers’ new products.

The Company plans to expand its leadership in the premium smartphone segment with the launch of Galaxy S23 while the Networks Business will focus on the domestic and overseas businesses, including North America. The Digital Appliances Business will aim to boost sales in the premium segment through new models, such as the BESPOKE Infinite Line.

For 2023, while the macroeconomic uncertainties are expected to persist, the Company anticipates demand to begin recovering in the second half. The semiconductor business will continue to reinforce market and technology leadership and expand the proportion of advanced nodes and products, such as DDR5, LPDDR5x and Gate-All-Around (GAA) processes.

Earnings at SDC’s mobile panel business is expected to be robust, and the large panel business will focus on growing the QD-OLED business and improving profitability.

The Device eXperience (DX) Division plans to improve competitiveness by strengthening the premium product line-up, based on the Company’s technology leadership. The Division also plans to expand the SmartThings ecosystem through differentiated technologies and partnerships to provide customized, hyper-connected user experiences.

The Networks Business is expected to maintain revenue growth by actively responding to new market opportunities, particularly in overseas businesses, and by reinforcing technology leadership in 5G core chips and virtualized Radio Access Network (vRAN).

For the Digital Appliances Business, the Company will continue to provide hyper-connected user experiences based on SmartThings and enhance the competitiveness of premium products centered on BESPOKE models.

The Company’s capital expenditures in 2022 reached a total of KRW 53.1 trillion, including KRW 47.9 trillion for semiconductors and KRW 2.5 trillion for displays. In the fourth quarter, capital expenditures were KRW 20.2 trillion, with KRW 18.8 trillion in semiconductors and KRW 0.4 trillion in displays. Spending on memory was concentrated on investing in P3 and P4 infrastructure, in preparation for mid- to long-term bit supply and in EUV to enhance competitiveness. Foundry investments focused on expanding the production capacity of advanced nodes at Pyeongtaek as well as on the initial capacity for 3 nanometer (nm) and the infrastructure for the Taylor site.

Memory Earnings Declined in Q4; Semiconductor To Focus on High-end Product Demand in Q1

The semiconductor businesses posted KRW 20.07 trillion in consolidated revenue and KRW 0.27 trillion in operating profit in the fourth quarter.

Overall memory demand weakened as customers continued to adjust their inventories amid deepening uncertainties in the external environment. In addition to the base effect that Bit growth was below the market level last quarter, Samsung achieved Bit growth that exceeded the market by expanding sales, focusing on server applications. But, due to worsened consumer sentiment caused by deepening macro issues, the price fell further and with the effect of a meaningful amount of inventory valuation loss, the result decreased significantly compared to the previous quarter.

For DRAM, demand for server was limited as Set build declined because of economic uncertainty and customers’ stance on inventory reduction remained. Mobile and PC demand was weak because of major customers’ continued inventory adjustments and Set build reduction. But the Company expanded the portion of cutting-edge nodes by optimizing its product portfolio and actively responded to the demand for high-density products focusing on major data centers and server OEM customers. For NAND, demand for server SSD was somewhat stagnant because of customers’ inventory adjustments.

Looking to the first quarter, customers’ inventory adjustment stance has remained unchanged as economic uncertainties continue. Although demand recovery momentum in the short-term is concerned, Samsung will continue to minimize any adverse impacts by actively addressing the demand for high-end products such as LPDDR5x, with timely preparation for fast-growing DDR5 demand for server and PC.

In 2023, based on cost competitiveness, the Memory Business plans to expand the proportion of high-value-added products by addressing the demand for high-density server SSDs, responds to the high-density trend of smartphones and PC and strengthens its market leadership.

The System LSI Business saw its earnings decline in the fourth quarter due to sluggish sales caused by inventory adjustments and a decrease in sales for major components.

However, the mobile SoC business achieved its highest-ever full-year revenue and the Automotive SoC business has solidified its mid- to long-term growth base by supplying an initial sample on schedule for a European premium OEM and by signing an MOU for product development with an autonomous driving solution company in the US.

In the first quarter, impacts of sluggish demand and inventory adjustments are expected to continue for the time being. Samsung will strive to expand sales of low- to mid-priced volume zone SoCs and 200MP image sensors. And for automotive SoCs, the Company will try to sustain growth momentum through additional orders from European premium OEMs and for self-driving products.

For 2023, Samsung expects the impacts of the economic downturn to continue for the time being. However, analysis of smartphone purchase patterns suggests that demand will continue to polarize between premium and low-priced phones.

In order to respond to this divided market, for SoCs, the Company will expand sales in the volume zone while reinforcing the position of its products for flagship devices. Samsung will also ensure its major smartphone OEM customers successfully launch flagship models by smoothly supplying and expanding the line-up of its differentiated 200MP image sensors.

The Foundry Business once again set a new record in the fourth quarter for quarterly revenue thanks to increased contributions from advanced nodes for customers, an increased portion from HPC and the continuous evolution of mature processes; and its full-year sales also reached an all-time high. However, its utilization rate started to decline due to inventory adjustments.

Regarding next-generation GAA processes, the 3nm first-generation process is currently being mass-produced with a stable yield and based on the first-gen mass-production experience, the development of the 3nm second-generation process is progressing rapidly. In addition, for the process for automotive and following the mass production of 5nm, the Company started developing 4nm.

In the first quarter, Samsung expects the utilization rate to fall and earnings to decline accordingly due to weak demand.

In 2023, demand may fall temporarily in the first half of the year due to the economic slowdown and inventory adjustments. However, the Company expects market demand to recover in the second half, centering on HPC and Auto sectors.

Samsung will strive to win new customers for the 3nm second-generation process, to focus on the development of the first-generation 2nm process and continue to develop specialty and mature processes to diversify within applications such as Automotive/IoT.

Finally, given the rising importance of next-generation package technology in the HPC and mobile market, the Company has established an AdVanced Package (AVP) business team within the Device Solution Division to expand the advanced package business and bolster synergies between business units.

Mobile Display Saw Solid Earnings; To Focus on OLED and QD-OLED in 2023

SDC posted KRW 9.31 trillion in consolidated revenue and KRW 1.82 trillion in operating profit for the fourth quarter.

The mobile display business achieved solid results by focusing on high-end smartphone products despite market demand continuing to contract. For the large display business, its losses lessened in the fourth quarter thanks to increased sales of TVs during the end-year peak season. In addition, the Company exhausted its LCD inventory, completing the switch to a full-fledged QD-OLED centered business.

Looking ahead to the first quarter, Samsung expects smartphone demand to decline year-on-year due to the economic slowdown in major regions. The Company will strive to maintain its solid earnings for the mobile display business by actively responding to launches of flagship products by major customers.

In the large display business, Samsung will secure additional demand and promote an early ramp-up with the introduction of a new lineup of ultra-large TVs and large-size monitors.

In 2023, the business environment is expected to remain challenging due to unstable market conditions and intensifying competition. For the mobile display business, the Company plans to strengthen its market dominance with technological superiority in the relatively solid high-end smartphone market. In addition, Samsung will capitalize on the accelerated transition to OLED by leveraging its cost competitiveness, which is the result of its preemptive investments.

In the large display business, the Company will continue to improve profitability by solidifying its sales base in the premium market, backed by stable yields.

MX To Expand Flagship Product Sales Amid Persistent Macro Uncertainties

The MX and Networks businesses posted KRW 26.90 trillion in consolidated revenue and KRW 1.70 trillion in operating profit for the fourth quarter.

Market demand for smartphones remained weak in the fourth quarter, with the mass market contracting sharply due to continued inflation and geopolitical instability. The MX Business reported a decline in both sales and profit quarter-on-quarter, due to fading new-product effects of flagship models and a drop in smartphone sales on weak demand from the economic slowdown. The impact of the decline in sales of mass-market smartphones was greater than previously expected while flagship sales held up well relative to market projections.

In the first quarter, a sequential decrease in market demand is expected across all smartphone segments, amid continuous macroeconomic uncertainties. The Company plans to expand flagship product sales with the successful launch of its new Galaxy S23 series, equipped with an enhanced camera and gaming functionalities, among others. Samsung will also continue to enhance its Galaxy ecosystem products, consisting of PCs, tablets and wearables, while maintaining its focus on effective resource management for solid profitability.

In 2023, the Company expects smartphone market demand to contract due to persistent macroeconomic conditions. Mass-market models are expected to be impacted the most while consumer demand for premium smartphones and tablets is projected to stay relatively solid.

The MX Business plans to achieve strong sales and solid profitability by strengthening the competitiveness of its premium flagship products. For the mass-market segment, the Company plans to collaborate with mobile carriers on various sales programs, including those aimed at expanding the 5G smartphone user base. It also plans to improve the premium product experience for its tablets and wearables, through upgraded product features and multi-device experiences.

Visual Display To Continue Focus on Premium and Lifestyle Products

The Visual Display and Digital Appliances businesses recorded KRW 15.58 trillion in consolidated revenue and KRW 0.06 trillion in operating loss for the fourth quarter.

Market demand for TVs increased quarter-on-quarter on the back of year-end seasonality but contracted year-on-year due to the global economic slowdown. The Visual Display Business posted higher results than the previous quarter by meeting regional, peak-season demand and expanding sales of high-value-added products, including Neo QLED and Lifestyle models. However, results declined from a year earlier due to weaker consumer sentiment from rising interest rates and inflation.

Looking ahead to the first quarter, market demand is expected to decline both quarter-on-quarter and year-on-year because of seasonality and the ongoing impact of the global economic downturn. Samsung will focus on capturing demand for premium products, including our 2023 Neo QLED, and strengthen partnerships with major channel partners. The Company will also aim to secure profitability by optimizing operations and manage costs.

In 2023, overall TV demand is expected to remain stagnant as market uncertainties are projected to persist. Based on the demand for premium products, Samsung will focus on the ultra-large-screen market with 98″ Neo QLED and continue innovations in premium products by releasing MicroLED models in various sizes as well as providing more options for OLED TVs and gaming monitors.

Total consolidated revenue was a record for the third-quarter at KRW 76.78 trillion despite a challenging business environment, while operating profit declined 23% from the previous quarter to KRW 10.85 trillion. With record revenue in each of the respective quarters so far this year, the Company expects annual revenue to surpass the historical high set in 2021.

Earnings in the Memory Business declined as inventory adjustments of customers exceeded market expectations and demand for consumer products remained weak. The System LSI Business saw lower profits due to weak demand for mobile phones and TVs, while the Foundry Business posted a record quarterly revenue on improving yields in advanced nodes.

SDC (Samsung Display Corporation) saw record revenue for the mobile panel business as demand increased following the release of new flagship smartphones, including foldables, while the large panel business continued to post losses amid weak TV and monitor markets.

The MX (Mobile eXperience) Business posted solid profitability, driven by sales of flagship products, including foldables, as well as new wearables. The Networks Business saw an improvement in earnings, led by overseas businesses, including securing a deal with Comcast.

The Visual Display Business expanded sales of premium products, but earnings declined due to weak demand and increased costs. The Digital Appliances Business, despite enhanced product mix, saw continued challenges due to higher materials and logistics costs amid sluggish demand.

The strength in the U.S. dollar against the Korean won benefited the Company’s component businesses, resulting in an approximately 1.0 trillion won company-wide gain in operating profit compared to the previous quarter.

In the fourth quarter, while the Memory Business expects there to be fundamental server demand based on core infrastructure investments, inventory adjustments are likely to continue. The Company plans to actively address demand for high-density products and maintain priority on DRAM profitability. For the System LSI Business, new products from mobile customers are expected to drive growth in SoC revenue while in the Foundry Business, earnings momentum is expected to continue on solid demand from global customers and additional yield improvements.

SDC expects to maintain earnings growth in the mobile panel business, driven by strong demand for premium OLED panels for smartphones. The large panel business will expand the quantum-dot (QD)-OLED presence, increasing its customer base.

The MX Business will continue to sustain strong sales of premium smartphones and expand sales of tablets and wearables. The Company plans to focus on profitability amid ongoing macroeconomic uncertainties. For the Networks Business, the Company plans to expand overseas businesses, including in North America and Japan.

In the Visual Display Business, the Company will prioritize capturing demand in the premium segment and enhancing profitability through cost efficiency. The Digital Appliances Business will aim to increase revenue with higher sales in the premium segment and online channels during the year-end seasonality.

In 2023, demand is expected to recover to some extent, but macroeconomic uncertainties are likely to persist. The DS (Device Solutions) Division plans to actively address demand for high-density products and expand contributions from advanced nodes and adoption of new applications. The DX (Device eXperience) Division will continue to strengthen the leadership in premium segments and enhance the multi-device connectivity experience across mobile, TVs and home appliances.

In the Memory Business, after a dampened first half, demand is expected to rebound centering on servers as data center installations resume. The Company plans to align its supply strategy with the mid-term market outlook, taking into account the limited overall production in the industry. With the reorganization of the SoC business, the System LSI Business will further enhance competitiveness, and the Foundry Business is expected to reinforce advanced node technology leadership and win new orders in HPC and automotive segments.

For SDC, the Company plans to continue focusing on premium smartphones and boost sales to new applications, such as IT and gaming. The large panel business will seek to increase sales of QD-OLED by expanding the product lineup and enhancing the performance.

The MX Business will aim to boost revenue by increasing sales of flagship products centering on foldable devices and the S series. The Company also plans to secure solid profitability by strengthening large-screen premium tablets and maintaining high growth of wearables. The Networks Business will sustain revenue growth by expanding overseas businesses and reinforcing technology leadership in core 5G chips and vRAN (virtualized Radio Access Network) solutions.

In the Visual Display Business, the Company will maintain leadership in ultra large screen and premium market segments. The Digital Appliances Business will continue to make product innovations in energy-efficient and eco-conscious home appliances and aims to achieve revenue growth, mainly from the premium segment.

In the third quarter, Samsung Electronics’ capital expenditure reached KRW 12.7 trillion, including KRW 11.5 trillion spent in the DS Division and KRW 0.5 trillion in SDC. The cumulative total for the January-September period is KRW 33 trillion, with KRW 29.1 trillion allocated to the DS Division and KRW 2.1 trillion to SDC.

The full-year capital expenditure for 2022 is expected at approximately KRW 54 trillion, including KRW 47.7 trillion allocated to the DS Division and KRW 3.0 trillion to SDC.

This year’s capital expenditures in the Memory Business will focus on P3 and P4 infrastructure, as well as on advanced technologies, such as EUV, to enhance the Company’s market competitiveness. Investments in the Foundry Business will center on expanding the production capability at the Company’s sites in Taylor and Pyeongtaek to address demand for advanced processes using EUV, in line with our Shell-First strategy. For SDC, investments will focus on expanding the capacity of flexible displays for mobile products and improving the efficiency of large QD-OLED panel production.

Foundry Delivers Record Earnings; Memory To Aim for Higher-Than-Market Bit Growth in Q4

The Semiconductor businesses posted KRW 23.02 trillion in consolidated revenue and KRW 5.12 trillion in operating profit in the third quarter.

For the Memory Business, as customers’ inventory adjustments exceeded market expectations and the demand for consumer products continued to weaken, both DRAM and NAND bit growth were below guidance and its earnings declined compared to the previous quarter.

For DRAM, in the face of a worsening slowdown in demand across the industry, the Company maintained a disciplined sales strategy focused on profitability, and its inventory levels increased somewhat. For NAND, Samsung strengthened its product portfolio by consistently increasing the high-density portion in mobile and server OEM applications, but its overall bit growth was below guidance.

Looking to the fourth quarter, the Company aims to deliver bit growth that exceeds the market for both DRAM and NAND by actively addressing demand, focusing on high-density and high-performance products, in line with the needs of its customers.

For DRAM, Samsung will continue to strengthen its cost competitiveness and secure profitability by expanding cutting-edge node migration for server products and also prepare 16Gb-based products to cope with demand for high-density products of 64GB and higher. Moreover, the Company will focus on solidifying its market leadership by responding to LPDDR5x demand for new flagship mobile models. As for NAND, the Company will actively respond to the demand for high-performance and high-density products while also capitalizing on NAND’s high price elasticity to steadily unlock new demand.

Moving on to 2023, although geopolitical uncertainties are likely to dampen demand to some degree in the first half, demand may recover later next year, driven by resumed installations of data centers and the adoption of DDR5 for new CPUs. Regarding production, Samsung will align its supply strategy with mid-term outlook considering limited overall production in the industry. In particular, it will reinforce market leadership by actively meeting the rising demand for new interfaces, including DDR5 and LPDDR5/x, and for high-density products.

The System LSI Business saw its earnings decline in the third quarter due to a decrease in demand for major components. However, SoC revenue grew thanks to an increased portion of 5G, and the Company reinforced the foundation for mid- to long-term growth by winning OEM orders for automotive SoCs.

In the fourth quarter, Samsung expects sales in the SoC business to increase on the effects of a new product launch by major mobile customers, while its new low- to mid-priced SoCs are scheduled to start mass production.

In 2023, the Company will expand sales in volume-zone SoCs while also strengthening the competitiveness and status of flagship products. In addition, it will work closely with foundries in order to smoothly supply various 200-megapixel image sensors.

The Foundry Business achieved its highest ever quarterly revenue and operating profit in the third quarter thanks to steady improvements in advanced process yield and increased revenue contributions.

Following the shipment of the world’s first mass-produced 3-nanometer GAA, Samsung further strengthened its technology leadership by presenting next-generation 2-nanometer and 1.4-nanometer roadmaps.

In the fourth quarter, revenue is expected to see double-digit growth sequentially on solid demand from all applications, maximum production of an optimized product mix and an increased advanced-node portion of production. The Company also expects to deliver record sales and operating profit on an annual basis for 2022.

Looking ahead to 2023, demand in the first half is expected to slow temporarily due to macroeconomic uncertainties, an economic slowdown and inventory adjustments at customers. However, Samsung still expects to deliver annual growth on the back of second half contributions from mass production for new customer orders and continued strength in HPC, datacenter and Auto demand.

Mobile Display Earnings Improve; Large Display To Continue QD-OLED Expansion

SDC posted KRW 9.39 trillion in consolidated revenue and KRW 1.98 trillion in operating profit for the third quarter.

Mobile display earnings improved both year-on-year and quarter-on-quarter thanks to growth in demand attributable to launches of new models by major smartphone brands. The Company’s business strategy, which concentrates on premium OLED products led to the record-high quarterly earnings.

For large displays, although sales of QD-OLED products continued to rise, initial investment costs of QD-OLED caused continued loss.

Looking ahead to the fourth quarter, Samsung expects market growth to be weaker-than-normal due to sluggish consumer spending, despite strong seasonal effects for the smartphone and IT markets. The Company will try to maintain its earnings quarter-on-quarter by utilizing competitiveness in the high-end market and by capitalizing on favorable exchange rates, in spite of an otherwise unfriendly business environment.

In 2023, while macroeconomic challenges may persist, Samsung will focus on solid earnings through pre-emptive investments, development of differentiated technologies and effective management to ensure stable quality and yield. Also, the Company will collaborate more closely with customers to increase its OLED market share, promoting the advantages of OLED in new application areas such as IT, Automotive and Gaming.

In particular, in the AR/VR market, which is projected to enjoy full-fledged growth starting 2023, Samsung will develop the technologies that customers need and complete SCM in order to solidify its leadership in the display industry.

Flagship Sales Drive Mobile Profit; To Seek Revenue Growth and Solid Profitability in 2023

The MX and Networks businesses posted KRW 32.21 trillion in consolidated revenue and KRW 3.24 trillion in operating profit for the third quarter.

The MX Business posted higher revenue and operating profit from the previous quarter driven by new smartphone and wearable launches. Sales of the Galaxy Z Fold4 and Z Flip4 showed strong growth compared with the previous models, despite a challenging market environment. The Galaxy S22 series, launched in the first half, also maintained solid sales momentum, posting significant revenue growth from a year earlier.

Looking ahead to the fourth quarter, market demand for smartphones and wearables is forecast to increase from previous quarter due to year-end seasonality despite ongoing geopolitical issues and macroeconomic instability. Samsung aims to sustain strong sales of flagship products, including foldable devices and S22 series, and expand sales of Galaxy Ecosystem devices such as tablets and wearables. In addition, new mass market smartphone model launches is expected to help drive sales volume.

In 2023, smartphone and wearable markets are expected to grow amid continuing global economic instability. For tablets, while the low- to mid-end market is expected to contract slightly, demand for premium products is likely to remain solid. The Company will seek to maintain the high growth of foldables and expand sales of the S series, thus improving the product mix and extending revenue growth. In tablets, Samsung aims to increase revenue by reinforcing the premium product lineup and by enhancing the tablet experience through features such as S-Pen.

Moreover, the Company plans to provide a convenient multi-device experience based on SmartThings, while also boosting profitability through sales growth of Galaxy Ecosystem devices. With these efforts, it aims to achieve revenue growth in 2023 and secure solid profitability.

Visual Display Business To Focus on Premium Segment Leadership

The Visual Display and Digital Appliances businesses posted KRW 14.75 trillion in consolidated revenue and KRW 0.25 trillion in operating profit in the third quarter.

Overall market demand for TVs increased quarter-on-quarter in the third quarter led by improved seasonality, but contracted year-on-year, due to macroeconomic factors negatively affecting consumer demand. The Visual Display Business posted a decline in earnings, as a result of weaker demand, higher costs and unfavorable currency effects in some regions. Nevertheless, the Company solidified its leadership in the premium segment.

In the fourth quarter, Samsung expects market demand to improve quarter-on-quarter due to year-end seasonality, but macroeconomic uncertainties are expected to persist. The Company plans to utilize sales opportunities such as Black Friday and global sporting events, focusing on its Neo QLED, Lifestyle and super-big TVs. It will also focus on securing profitability through optimized operations and efficient cost management.

Looking ahead to 2023, overall TV demand is expected to remain stagnant, while demand for premium products including super-big TVs will continue to grow. Samsung will continue product innovation centered on premium products and strengthen its focus on sustainable, eco-conscious management.

The Company posted a record consolidated revenue for the third straight quarter of KRW 77.78 trillion and operating profit of KRW 14.12 trillion, a 51% increase from a year earlier. The DX (Device eXperience) Division posted the highest revenue since 2013 while the DS (Device Solutions) Division reported a historical high for quarterly revenue.

The Memory Business achieved a record-high in quarterly sales for servers amid solid demand and results at the System LSI Business improved sequentially as prices increased. For the Foundry Business, demand was solid across all applications and the Company increased the portion of advanced processes.

SDC (Samsung Display Corporation) saw record first quarter results for mobile displays driven by strong sales at major smartphone customers, while for large displays the improvement of production yield of quantum-dot (QD) displays exceeded expectations.

The MX (Mobile eXperience) Business posted sequential increases in revenue and profitability thanks to strong sales of Galaxy S22 Ultra, positive responses to new, mass market 5G models and solid sales of Device Ecosystem products including tablets and watches. The Networks Business continued to expand overseas and met domestic 5G expansion needs.

Revenue at the Visual Display Business increased year-over-year with higher sales of premium, high-value products such as Neo QLED and Super Big TVs. The Digital Appliances Business posted a record high quarterly revenue driven by growth of premium products, centering on BESPOKE.

The strength in the US dollar against the Korean won outweighed the weakness in some emerging currencies, leading to a positive impact of approximately KRW 300 billion on operating profit compared to the previous quarter.

In the second quarter, while macroeconomic uncertainties and logistics issues are expected to persist, the DS Division will work to meet solid demand and the DX Division will focus on securing profitability with higher sales of new smartphone and TV products.

The Memory Business will work to meet the expected solid demand centering on server and expand the sales of high-value-added products. The System LSI Business will focus on maximizing supply of key components, such as SoCs and image sensors. For Foundry, the Company will solidify its technology leadership with the world’s first mass production of the 3-nanometer GAA process and continue to win new customers.

As for SDC, mobile displays is expected to maintain solid results year-on-year, driven by continued solid demand from major smartphone customers. In large displays, revenue is expected to increase with the release of TVs featuring QD displays. In the second quarter, LCD production will continue to ramp down as originally planned.

In the MX Business, revenue is expected to grow significantly year-on-year due to solid sales of Galaxy S22 series and higher sales of new mass market 5G models. The Company expects to achieve solid profitability by utilizing global SCM capabilities, despite macroeconomic uncertainties. For the Networks Business, the Company aims to win new business opportunities.

The Visual Display Business will focus on selling new models, including Neo QLED and The Freestyle, while the Digital Appliances Business will aim higher revenue and profitability by improving product mix with increased availability of BESPOKE products in the global market.

In the second half, while uncertainties related to the macroeconomic environment and geopolitical issues are likely to persist, the Company will prioritize increasing the portion of advanced processes for components and strengthen the premium lineup and leadership position in the DX Division.

In the Memory Business, server demand is expected to remain solid and the Company plans to increase sales of next-generation interfaces, such as DDR5 and LPDDR5. The System LSI Business will focus on expansion of its SoC lineup and the Foundry Business will seek to achieve meaningful profit by improving advanced node yields and increasing its portion of sales.

For SDC, sales is expected to increase in mobile displays driven by expansion of foldable products and accelerated adoption of OLED in new applications, such as IT, gaming, and automotive. The large display business will try to establish a leadership position in the premium segment and narrow losses with QD displays.

The MX Business expects to maintain a solid level of profitability with the expansion of the premium user base and by maximizing sales of new foldable products and increasing sales of new Device Ecosystem products. For the Networks Business, the Company will maintain growth by meeting domestic 5G needs and actively expanding in overseas markets as well as continuing to reinforce leadership in vRAN (virtualized Radio Access Network) technology.

In the Visual Display Business, the Company will strengthen its premium market position by expanding sales of differentiated strategic products, such as Neo QLED 8K and Lifestyle products. The Digital Appliances Business will continue to focus on increasing sales of premium products amid ongoing material cost and logistics issues.

The Company’s capital expenditures in the first quarter stood at KRW 7.9 trillion, including KRW 6.7 trillion spent on semiconductors and KRW 0.7 trillion on displays. Spending on memory was concentrated on infrastructure at P3 and on process migrations at fabs in Hwaseong, Pyeongtaek and Xi’an. Foundry investments were focused on developing and establishing the production capacity of under 5-nanometer advanced processes.

Memory Exceeded Guidance With Record-High Quarterly Sales for Server

The DS Division posted KRW 26.87 trillion in consolidated revenue and KRW 8.45 trillion in operating profit in the first quarter.

The Memory Business’s performance exceeded market forecasts as the memory price declined less than market expectations thanks to solid demand mainly from server and PC. However, the Company saw a slight profit decline due to a one-off special incentive and mild seasonality in some applications.

For DRAM, overall server demand stayed solid because of the increased DRAM content led by rising adoption of high-core CPUs and strong demand for datacenters. By preemptively assessing demand with the help of an advanced and proprietary machine-learning-based market sensing system, and by actively responding to demand for servers, Samsung exceeded its bit growth guidance and achieved record high quarterly sales for server.

As for NAND, server SSD demand for datacenters remained solid, driven by pent-up demand. In mobile, memory demand slowed slightly due to weak seasonality and inventory adjustment by some customers. Given the limited inventory level and future market conditions, the Company maintained its status quo, which is to refrain from excessive expansion of sales, and continued to increase the portion of high-density and high-value-added products.

Looking to the second quarter, Samsung expects server demand to remain relatively solid.

For DRAM, while uncertainties including component shortages need comprehensive monitoring, server demand is expected to stay relatively solid aided by growing adoption of DDR4 8CH CPU. The Company will continue to pursue the highest-quality portfolio by expanding sales of high-value-added and high-density products while actively responding to demand for applications that show the most growth potential.

For NAND, server SSD demand is expected to grow, driven by expanded investment mainly for datacenters amid shortage issues in chip production and in active and passive components. For Client SSD, enterprise PC demand is likely to be solid while consumer PC demand is expected to shrink. Samsung will maintain efforts to actively address SSD demand for enterprise sector with its business competitiveness.

In the second half, server demand is expected to be relatively solid resulting from increased demand for DDR5 and high-density trend, but the pace at which component shortages are resolved needs constant monitoring.

For mobile, demand can potentially recover sooner than expected as macro issues are expected to be cleared. In particular, as major manufacturers are scheduled to release new products in the second half of the year, the Company expects Set Build to recover. In addition, demand for high-density products and LPDDR5x is forecast to increase as manufacturers strengthen flagship lineups.

While maintaining a product mix focused on server and high-end PCs, Samsung will respond to new demand in a timely manner by expanding supply of cutting-edge interfaces such as DDR5 and LPDDR5x. In addition, the Company will center its portfolios on high-value-added and high-density solutions and steadily realize cost reductions, thus strengthening its market leadership.

The System LSI Business saw its earnings improve quarter-on-quarter due to foreign exchange gains and increases in sales price despite the weak seasonality of the mobile industry and inventory adjustments. DDI sales increased year-on-year by more than 30% in both large panel and mobile display. In first quarter, the Company began shipping SoCs for volume zone and started the mass production of new 5G FR2 RFICs and 0.64-micrometer 108-megapixel image sensors.

In the second quarter, the SoC supply is expected to grow thanks to production yield improvement for flagship SoCs and adding mid-range line-up.

In the second half, the System LSI Business plans to further expand the 5G SoC lineup, and supply its technology leading 108- and 200-megapixel sensors and meet the customers’ requests. The Company expects the growth rate to be higher than the previous year, improving both profitability and sales.

The Foundry Business achieved its highest ever first quarter sales, thanks to solid demand from all applications and improvements in the yields of the advanced process.

Through close collaboration between the R&D center and the Foundry Business, the Company has entered the stabilizing yield trajectory of the advanced process, while continuously improving production capability. In addition, the Company added new orders for applications such as HPC/Automotive to prepare for future growth engines and improved its ability to respond to future demands through new investments in Taylor in the US and domestic facilities.

In the second quarter, the Company will continue to improve the yield of the advanced nodes and plans to secure a technological edge through first-generation GAA process (3GAE) quality verification and mass production for the first time in the industry. Furthermore, the Company will also continue to develop the 3-nanometer second-generation GAA process (3GAP) according to the planned schedule.

In the second half, the Company expects the foundry supply shortage to continue and will continue its technology leadership through the yield improvement of the GAA process and aim to exceed market growth by improving the yield and adopting pricing strategies to ensure future investments.

Display Earnings Improve Year-on-Year; To Focus on Premium OLED and QD Displays in 2H

SDC posted KRW 7.97 trillion in consolidated revenue and KRW 1.09 trillion in operating profit for the first quarter.

Mobile display earnings improved from a year earlier, driven by solid demand for premium products and positive effects of foreign exchange movements. Growing adoption of OLED displays in laptops and gaming devices also contributed to the results.

For large displays, Samsung rolled out QD monitors in the first quarter, which were well received in the market and thus raised expectations for QD TVs scheduled to be released in the third quarter. Additionally, the Company is quickly stabilizing yield of QD displays.

Looking ahead to the second quarter, Samsung expects to see a decline in mobile displays earnings compared to the previous quarter because of prolonged geopolitical conflicts and lockdowns in some regions. Large display earnings is likely to enhance in the second quarter as the Company is due to ramp down LCD production as scheduled and expand shipments of QD products in earnest.

In the second half, despite lingering uncertainties surrounding the business environment, the smartphone market size is forecast to remain at last year’s level, led by the economic recovery of advanced countries.

Samsung will further reinforce its leadership in the premium OLED display market, with stable SCM capabilities and foldable lineup expansion. The Company also aims for sustainable growth based on diverse product segments, ranging from smartphones to IT, automotive, gaming, and wearables, by capitalizing on its competitive edges in SCM capabilities and new technology development. In particular, in order to secure a solid OLED position in the fast-growing EV market, Samsung will focus on offering a full lineup of solutions spanning from rigid to foldable displays.

For large displays, the Company is committed to stabilizing production of QD displays while actively promoting the product, in the hope of diversifying its customer base and positioning QD displays in the premium display segment.

Mobile Earnings Remain Solid Despite Supply Shortage; To Focus Flagship Sales in Q2

The MX and Networks businesses posted KRW 32.37 trillion in consolidated revenue and KRW 3.82 trillion in operating profit for the first quarter.

Overall market demand declined both quarter-on-quarter and year-on-year due to a weak seasonality and geopolitical uncertainties. However, MX business saw growth in both revenue and profitability from the previous quarter despite supply shortage. Strong sales of the Galaxy S22 series since its launch in Q1 helped drive the revenue growth, on the back of Galaxy S22 Ultra with S-Pen garnering positive feedback from the existing Galaxy Note customers. Mass-market 5G smartphones including new A-series as well as Device Ecosystem products such as tablets including the Galaxy Tab S8 and wearables have also contributed to the profit growth.

In the second quarter, smartphone market demand is forecast to slightly decline quarter-on-quarter amid continued seasonal effect with uncertainties over Covid-19 and geopolitical issues. The MX Business aims to secure revenue growth year-on-year and double-digit profitability by leveraging its global supply chain management (SCM) capabilities. With the component shortage for Galaxy S22 series expected to improve, the Company will strive to maintain the strong sales of flagship smartphones while also actively responding to increased market demand for the mass-market 5G models.

For the second half, uncertainties over prolonged COVID-19 and component shortage are likely to persist. However, the smartphone market is projected to continue to grow and the wearable market is likely to see a double-digit growth.

The MX Business will solidify its leadership in the flagship market by accelerating innovation while maximizing sales of the new foldable models and Device Ecosystem products ensuring supply of key parts and better customer experiences through collaboration with partners. The Company will also closely cooperate with the VD and DA businesses under DX division to further strengthen seamless and connected experiences across Samsung products. With these efforts, the Company will strive to achieve sales growth in 2022 and maintain solid profitability with an improved product mix and operational efficiency.

Strong Focus on Premium Products Amid Continued Market Uncertainties

The Visual Display and Digital Appliances businesses posted KRW 15.47 trillion in consolidated revenue and KRW 0.8 trillion in operating profit in the first quarter.

First quarter demand for TVs contracted quarter-on-quarter following the end of year peak in Q4 and along with geopolitical issues stemming from Russia. It also declined year-over-year, following the previous year’s high baseline attributed to pent-up demand. The Company expanded revenue and profit year-over-year by working closely with channel partners, and actively targeting high value product demand. Its new Neo QLED line-up, upgraded with a new level of picture quality and sound, has garnered a positive response from the market.

In the second quarter, the Company expects TV demand to decline both quarter-on-quarter and year-over-year due to increased outdoor activities and continued market uncertainties. Samsung plans to achieve growth by continuing its focus on premium products. In response to persistent issues with raw materials and logistics, the Company plans to further optimize operations by establishing sales and supply plans further down in advance.

In the second half, while macroeconomic risks are expected to persist, the Company will capture demand from sporting events during the peak season, and solidify its premium leadership with sales of its Neo QLED 8K and Lifestyle Screens as well as innovative products like Micro LED and Odyssey Ark.