Samsung Reports Decline in Storage Business, Focuses on DDR5 Adoption

Samsung recently released its financial report for the first quarter of 2023, which includes the performance of its SDS division. In Q1, the SDS division generated revenue of KRW 13.73 trillion, with an operating loss of KRW 4.58 trillion.

The storage segment experienced a significant decline in performance compared to the previous quarter. This was primarily due to inventory adjustments by server customers, reduced sales, procurement delays, and slow recovery in demand from consumer markets for smartphones and PC applications. However, the NAND segment managed to keep up with the industry's trend toward higher-density products, despite being affected by weak demand.

For the second quarter, Samsung plans to accelerate the transition to DDR5 and LPDDR5x memory nodes, focusing on addressing new use cases such as AI. In the NAND segment, the company will emphasize cost competitiveness.

The System LSI business witnessed a substantial decline in earnings in the first quarter. However, the pressure on customer inventories is expected to decrease in the second quarter, potentially contributing to a slight recovery in profitability.

Samsung predicts that in the second half of the year, as downstream customer inventories decrease, there will be a gradual recovery in demand for storage products and system IC components. Additionally, with the recovery of mobile product demand in the Chinese market, System LSI aims to re-enter the flagship market and expand its business domain.

Regarding the foundry business, Samsung is currently mass-producing the first-generation 3nm process node using GAA technology. Development of the second-generation process, focusing on high performance and low power consumption characteristics, is underway, with the goal of achieving mass production by 2024. The infrastructure development for the 2nm process design is progressing smoothly.