Samsung sees 95% profit drop as chips struggle, Galaxy S23 brings a boost

Ben Schoon | Apr 27 2023 - 9:46 am PT

The smartphone market as a whole is going through some rough times, but Samsung Electronics is now reporting a massive hit with a 95% profit drop in Q1 2023.

In its latest earnings report, Samsung Electronics says that it saw profits drop by 95% year-over-year, a staggering figure that saw profits drop from 14.12 trillion Korean won in Q1 2022 to just 640 billion Korean won this past quarter. According to CNBC, this is Samsung’s lowest level since 2009.

This dip didn’t come from the company’s mobile unit, though. Despite smartphone sales as a whole being down year over year, Samsung reported a 22% boost to revenue and 3% jump in profits from mobile device. Much of that came from better performance in the premium space, as Samsung explained:

The premium market grew in terms of both volume and value even amid weak smartphone demand caused by lingering macro uncertainties. Sales grew and profitability recovered to reach double-digits on the back of strong sales of new premium models, centering on S23 Ultra, and efforts to enhance operational efficiencies.

Rather, the majority of the loss comes from Samsung’s chips division. The company posted a 4.58 trillion won ($3.4 billion) loss for Q1 2023 as demand has dropped and chip prices were also falling dramatically due to stockpiles formed during the early days of COVID-19.

Samsung expects a “limited recovery” in Q2, with even better conditions in Q3, but in the meantime is making a “meaningful” cut to production.