Samsung and Intel both saw their semiconductor revenues decline dramatically in the first quarter, with Samsung down by 49% and Intel down by 36% compared to a year earlier.
Both companies are still adjusting to inventory corrections and macroeconomic conditions while demand is especially low for PCs and smartphones. In Samsung’s case, low demand hit its memory business for DDR and NAND.
For Intel, the client computing group saw a 38% decline in revenue to reach $5.8 billion, while data center and AI were down 39% to reach $3.7 billion. Network and edge dropped 30% to $1.5 billion.
Overall, Intel reported first quarter revenue of $11.7 billion, which might have been worse if not for improvements over a year ago in Mobileye and Intel Foundry Services.
As disastrous as it might sound, Intel CFO David Zinsner noted the company had exceeded its first-quarter expectations on the top and bottom line. The company has laid off workers and cut costs in recent months after its fourth quarter 2022 results were described by analysts at “terrible” and a “historic collapse.”
CEO Pat Gelsinger called the results “"solid” as the company continues a transformation with a heavy focus on its foundry business, with a $1 trillion market opportunity in coming years. “While we remain cautious on the macroeconomic outlook, we are focused on what we can control as we deliver IDM 2.0.,” he said in a statement.
On a call with analysts, Gelsinger said despite the first quarter revenue decline for client computing Intel sees "increasing stability int he PC market" but he said server and networking demand "have yet to reach bottom" partly due weak cloud demand.
Investors liked the Intel earnins report, with shares improving by nearly 3% to $29.86. Samsung shares gained by less than 1%.
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Samsung’s semiconductor revenues dropped 49% in the first quarter to 13.7 trillion won ($10.2 billion) when compared to a year earlier. The company blamed “weak demand in the memory business, a decline in utilization rates in the foundry business and continued weak demand and inventory adjustments from customers” in a statement.
Samsung managed to stay in the black, however, due to sales of its smartphones, display and home appliances.
Samsung is the world’s biggest memory chipmaker and reported the business saw an operating loss of $3.4 billion for the quarter compared to $6.3 billion profit from a year earlier.
The South Korean company predicted a gradual market recovery in the second half of 2023 and a rebound in global demand as its semiconductor devision focuses on high-capacity server and mobile products