Electronic Components Industry Update: Samsung’s Q1 Profits Plummet, MCU Inventory Pressure Persists, and Global Notebook Shipments Drop

1. Samsung’s Q1 Operating Profit Falls by 95.8%: Chip Production to be Reduced

Samsung Electronics has reported a lower-than-expected operating profit of 600 billion won in Q1 2023, a year-on-year decrease of 95.8%. The slowdown in the global economy and a glut of chips have contributed to slower purchases by buyers, resulting in a decrease in sales of 19%. Samsung Electronics has announced plans to “meaningfully” cut chip production.

2. MCU Inventory Pressure Continues: Second Quarter Expected to See Gradual Economic Recovery

According to Taiwan Electronics Times, most MCU manufacturers are still under pressure to cut prices due to poor demand in the terminal market and high inventory. The MCU industry is still destocking, but the economy is expected to gradually recover in the second quarter.

3. Rush to Meet Order Tide: Some Companies See 20% Rebound in Order Volume

Memory chip manufacturers have seen an urgent wave of orders due to the buying momentum of mass replenishment at low prices. The reduction of production by major manufacturers has almost become “unstoppable”. Companies such as Licheng and Phison have reported a rebound in order volume of about 20%.

4. Global Notebook Shipments Drop Nearly 40% YoY in Q1 2023

TrendForce’s report shows that global notebook shipments in Q1 2023 will be about 33.9 million units, a decrease of 39% from the same period last year. The weak economy has impacted consumer confidence, dragging down the progress of the elimination of complete laptops in the channel. However, it is expected that the demand for channel replenishment will increase in the second quarter as the inventory pressure of notebook computers and components eases.

5. Samsung’s Q1 Profit Plummets 92%, Storage Production to be Cut

Samsung Electronics is expected to report a 92% plunge in Q1 profit, the lowest level in 14 years. The glut of chips has worsened and buyers such as data centers and computer makers have slowed down purchases due to the global economic slowdown. Samsung’s chip division is likely to report a quarterly loss of more than 3 trillion won, with revenue in particular memory chips hitting rock bottom. Samsung Electronics is considering cutting production to address the sluggish market conditions.