Samsung's Semiconductor: ¥75.04B 2023 Loss, Salary Freeze

On January 18th, as reported by The Korean Daily, Samsung Electronics' semiconductor business encountered its most substantial loss since its establishment in 2023, primarily due to challenges in its storage chip sector. Consequently, senior executives within Samsung Electronics' semiconductor business division have decided to implement a freeze on salary adjustments throughout the year 2024.

The Device Solutions (DS) division, a component of Samsung's semiconductor business, recently convened an emergency high-level executive meeting under the leadership of department head Kyehyun Kyeong. During this meeting, the resolution to freeze salary adjustments in 2024 was formalized. Samsung Electronics communicated that both the management and executives have arrived at a collective understanding, deeming the current situation as a critical juncture necessitating special measures and exemplary leadership in response to the ongoing decline in business performance.

The executives present at the meeting unanimously recognized the imperative for bold internal innovation and an urgent mindset in navigating the semiconductor market and overcoming challenges posed by the artificial intelligence revolution. They expressed a firm commitment to swiftly ensuring competitiveness and implementing effective management practices.

The report underscores that Samsung's DS division faced unprecedented challenges in its performance throughout 2023. Operating losses for the DS division totaled 4.58 trillion Korean won in the first quarter, 4.36 trillion Korean won in the second quarter, and 3.75 trillion Korean won in the third quarter. Cumulatively, losses for the first three quarters reached approximately 12.7 trillion Korean won. While detailed performance figures for each business division in the fourth quarter of 2023 have not been disclosed, market analysts anticipate an additional loss of about 2 trillion Korean won for the DS division, bringing the total annual loss for 2023 to 14 trillion Korean won (approximately 750.4 billion Chinese yuan).

Historically, Samsung Electronics previously implemented emergency management measures in 2009 following the global financial crisis and in 2015 during periods of suboptimal performance. These measures included salary freezes for employees, including senior executives. Despite the general industry expectation of a positive shift in the semiconductor sector in 2024, Samsung continues to uphold a vigilant stance in the face of the uncertain internal and external business landscape, emphasizing its unwavering determination to overcome prevailing challenges.