Samsung Electronics has disclosed its financial results for 2Q23, reporting quarterly revenue of 60.01 trillion Korean won. Although the DS division saw a rebound in revenue, the fall in smartphone shipments led to a 22% YoY decline.

Samsung highlighted an upturn in its memory business in Q2 due to a concentrated focus on HBM and DDR5 products. The company anticipates strong demand in AI applications, which has helped their DRAM shipments surpass expectations. In terms of panel production, earnings from smartphone panels paralleled those of the first quarter, largely owing to the sales of high-end panels. Meanwhile, the production of large panels continues to target the high-end QD-OLED market.

On the foundry side, Samsung reported a quarterly revenue increase during the second quarter, which was bolstered by growing sales to certain American clients. Yet, fab expansion and uncertainty in short-term demand contributed to a reduction in the utilization rate, triggering a substantial decrease in operating profit. The smartphone division experienced a drop in market demand, influenced by macroeconomic conditions such as high interest rates and inflation.

TrendForce reports that Samsung projects a rebound in global demand during 2H23, which could boost their earnings. Although potential macroeconomic risks are on the horizon, they aim to sustain profitability through sales of high-value products and the launch of innovative new products. However, considering the uncertainties for demand, TrendForce cautions that recovery in demand is expected to be gradual, with commodities prices only improving if suppliers maintain ongoing production cuts.

(Photo credit: Samsung)

China’s Automotive Price War Rages On: Some automakers have been gradually reclaiming outsourced orders for the battery, motor, electronic control system since May and June, shifting towards in-house production. Recently, they have asked suppliers to requote for second-half orders, with Samsung, Murata, Taiyo Yuden, PSA and Yageo actively vying for contracts.

Due to the more stringent certifications in the automakers’ supply chain compared to tier 1 suppliers, the majority of battery, motor, electronic control system MLCC suppliers still come from Taiwan, Japan, and Korea. Among them, Korean manufacturer Samsung has made significant progress in the Chinese automotive market this year. They have been actively providing sample for certifications and competitive pricing, securing a large share of orders and displacing Japanese manufacturers Murata and TDK, who had long held the lead.

Ongoing negotiations between automakers are expected to conclude with finalized orders by the end of August. According to the channel check from TrendForce, it appears that Samsung will maintain its leading position with a low-price strategy, while Murata, unwilling to be drawn into a price war reminiscent of consumer electronics, will remain conservative with pricing to secure a substantial market share. Taiyo Yuden, PSA and Yageo, though limited in automotive product offerings, have been proactive in their bidding efforts and have secured several orders.

(Photo credit: Yageo)

DRAM Spot Market:

Unlike the contract market, the spot market still shows daily drops mainly due to the influx of used chips that were stripped from decommissioned server DRAM modules. Since the demand situation has yet to turn around, spot prices on the whole continue to slide. There are no indications of a rebound in the near future. Regarding the mainstream chips (i.e., DDR4 1Gx8 2666MT/s), their average spot price fell by 0.67% from US$1.492 last week to US$1.482 this week.

NAND Flash Spot Market:

The NAND Flash spot market has yet to recover from its sluggishness since the end of June, and suppliers are still lingering under heavy sales pressure with no aggressive purchases due to the absence of peak season demand from Europe and America that was previously anticipated. These aforementioned stocking dynamics have led to an increase of 0.14% in 512Gb TLC wafer spots this week, arriving at US$1.404.

TSMC held its Q2 earnings conference today (20th). TrendForce utilized AI tools to transcribe and made slight edits, presenting the full text of TSMC’s operational status report delivered by Chairman Mark Liu, CEO C.C. Wei, and CFO Wendell Huang. …

DRAM Spot Market
The situation in the spot market has not noticeably changed from last week and is still showing sluggish demand. Additionally, as mentioned in previous bulletins, there has been an influx of chips stripped from decommissioned server DRAM modules. These chips primarily come from the two major South Korean suppliers’ legacy processes and are reused in PC DRAM and consumer DRAM products after software modifications. In terms of performance, the reused chips from the Korean suppliers can reach a data rate of 3200MT/s. Overall, the presence of these reused chips continues to exert downward pressure on spot prices, particularly for DDR4 products. The average spot price of mainstream chips (i.e., DDR4 1Gx8 2666MT/s) fell by 0.27% from US$1.497 last week to US$1.493 this week.

NAND Flash Spot Market

The spot market remains unaffected by the quarterly list prices of suppliers that have increased or leveled certain packaged dies, where sluggishness is seen lingering among overall demand under sporadic inquiries. In addition, concluded prices are still dropping slowly due to the lack of urgency among clients under sufficient stocks of the current spot market. 512Gb TLC wafer spots have dropped by 0.14% this week, arriving at US$1.402.