Samsung Electronics announced in its third-quarter online earnings call on Oct. 31 that it will expand its supply of cutting-edge memory, including 10-nm 4th-generation (1a) and 5th-generation (1b) DRAM and 7th- and 8th-generation V-NAND flash memory, without making any downward adjustments.
“Demand for cutting-edge memory essential to the operation of high-performance products such as generative AI is growing rapidly,” said Kim Jae-jun, vice president of Samsung Electronics. “On the other hand, the expansion of our advanced node process is limited due to capital investment cuts in the memory industry since last year.”
“Samsung Electronics will further cement its position in the cutting-edge memory market by maintaining its capital investment to secure its competitiveness in the mid- to long-term,” Kim added. Samsung Electronics’ DS Division plans to invest 47.5 trillion won in capex annually. The DS Division is in charge of the semiconductor business.
However, Kim explained that for some legacy products, the company is continuing to adjust production volumes to normalize inventories. “There will be selective production adjustments to normalize inventories in a short time,” Kim said. “A supply cut will be larger for NAND flash than for DRAM.”
On the same day, Samsung Electronics announced its final business results in the third quarter, reporting 67.4047 trillion won in sales and 2.4336 trillion won in operating profit on a consolidated basis. Its sales were down 12.21 percent from the third quarter of last year, but up 12.3 percent from the second quarter of this year. Its operating profit was also down 77.57 percent compared to the same period of last year. However, the figure was significantly higher than a market forecast of 1.8358 trillion won.
In particular, the DS Division showed improved business performances, which led to 2-plus trillion won in operating profit. It posted an operating loss of 3.75 trillion won, significantly narrowing its deficit compared to 4.58 trillion won in the first quarter and 4.36 trillion won in the second quarter.
The DX division, which covers home appliances and mobile businesses, racked up 44.2 trillion won in sales and 3.73 trillion won in operating profit. The Mobile Experience and Network Divisions, focusing on smartphones, generated 3.3 trillion won in operating profit, and the Consumer Electronics and Visual Display Divisions generated 380 billion won in operating profit. Samsung Display realized 1.94 trillion won in operating profit, and Harman, an automotive electronics subsidiary, logged 450 billion won.