Samsung sees memory biz return to profit, upbeat about foundry sales

Jessie Shen, DIGITIMES Asia, Taipei 0

Credit: AFP

Samsung Electronics has reported operating profits of KRW6.61 trillion (US$4.78 billion) on consolidated revenue of KRW71.92 trillion for the first quarter of 2024. Revenue was primarily driven by increased sales of flagship Galaxy S24 smartphones and higher memory semiconductor prices, while earnings were boosted by the memory business's return to profitability.

Samsung's Device Solutions (DS) division, which is mostly focused on semiconductors, reported KRW23.14 trillion in consolidated sales and KRW1.91 trillion in operating profits for the first quarter. During the quarter, the memory business returned to profitability by meeting demand for servers, storage, PC, and mobile, focusing on high-value-added products like HBM, DDR5, server SSDs, and UFS 4.0, as well as increasing ASP.

Memory back to profit

Samsung's memory business generated revenue of KRW17.49 trillion in the first quarter, up 11% sequentially and 96% from a year earlier. The company credited the positive performance to the robust demand for DDR5 and storage for generative AI as well as the ongoing price increase.

Looking ahead to the second quarter, Samsung anticipates increased demand for AI products as well as traditional server and storage solutions. To optimize its portfolio, the company intends to allocate more manufacturing to server and storage than to PC and mobile, and it is preparing for mass manufacture of HBM3E memory in response to GenAI demand. Samsung plans to mass produce and ship 128GB 1b-nm products in the second quarter.

Foundry loss narrows

Samsung's foundry sector saw its losses reduce marginally in the first quarter, thanks to efficient fab operations, but revenue has yet to increase due to weak seasonal impacts and persistent client inventory adjustments. Nonetheless, Samsung Foundry's order backlog reached a new high in the first quarter due to enhanced competitiveness in advanced technologies, the company reported.

Samsung expects a rebound in foundry sales in the second quarter, with double-digit growth as market circumstances gradually improve. The company also stated that it will complete developing the 2nm design infrastructure and prepare 4nm technology for 3D IC to increase competitiveness in advanced technologies.

In 2024, Samsung will mass produce GAA 3nm second-generation technology while also improving the maturity of 2nm technology to boost orders from high-growth areas such as AI and HPC, the company said in its presentation slides.

"In the second half of 2024, the foundry market is expected to see limited growth as uncertainties are likely to persist," Samsung said in its statement. However, the company expects its foundry business to outpace the market growth rate in annual sales thanks to increased sales of leading-edge technologies of 5nm and below.