Samsung, SK hynix suffer $16 billion loss in chip business [REWIND 2023]

Samsung Electronics' chip plant located in Pyeongtaek, Gyeonggi [YONHAP]

Samsung Electronics and SK hynix incurred a combined loss of more than 21 trillion won ($16.1 billion) in their chip businesses, primarily attributed to the cyclical downturn in the semiconductor industry in 2023.

The third quarter revenue of Samsung Electronics, the world's No. 1 memory chipmaker, plunged 77.6 percent year-on-year as its chip division, a cash cow for the conglomerate, continued to reel from a global supply glut.

Samsung's chip business accumulated an operating loss of 12.7 trillion won in the first three quarters of this year.

The oversupply of memory chips began to impede the global semiconductor industry from the end of 2022, as the demand for electronic devices, particularly smartphones and laptops, did not rebound even after the pandemic due to ongoing economic uncertainties.

SK hynix, a global top-tier memory chipmaker, was also unable to escape the industry slowdown.

SK hynix's third quarter revenue plunged by 17 percent year-on-year in 2023. It accumulated 8.1 trillion won of operating loss in the first three quarters of this year.

On the bright side, there are signs of the memory chip industry recovering, thanks to surging demand for advanced memory chips like high-bandwidth memory chips for AI applications. The production cuts implemented in the first half of the year have helped control inventory and stabilize price declines.

BY JIN EUN-SOO [jin.eunsoo@joongang.co.kr]