The United States harvests Huawei, and executive salaries are frozen
South Korea, the world's largest producer of integrated circuits and one of China's major producers of integrated circuits, will be hit hard by 2023, with profits falling by more than 80% and even executive salaries frozen.
Samsung Electronics released its 2023 earnings report, which expects sales to fall by 85%, mainly due to a significant loss in the tablet division, which is expected to reach 126900 million won, resulting in a sharp drop in Samsung's revenue.
Samsung, which once made its fortune in China, has established the largest memory chip factory in China except South Korea, and about 60% of Korean chips are sold to China, which also shows that China attaches great importance to the Korean chip industry. Although Samsung has a market share of less than 1% in China, it can bring nearly 300 billion yuan in revenue to China every year by exporting mobile phone products such as chips and organic light-emitting diode panels to China.
However, Samsung moved its TV and mobile phone factories out of this important market, and Samsung followed suit in the US embargo on memory chips in China, which led to a drop of more than 40% in South Korea's chip exports to China, and a drop of nearly half in memory chips.
Memory chips are the company's biggest profit**, but Samsung's profits have been declining since the first quarter of 2023, and the downturn in the Chinese market has affected many South Korean chipmakers, including Samsung, and Samsung's earnings report showed that the Chinese market has been hit much harder than expected, so much so that Samsung has had to freeze the salaries of executives to maintain cash flow.
In fact, China's memory chip industry has begun to take off, but domestic memory chips account for only 4% of the world's total, and compared to Samsung, which accounts for nearly 40% of the memory chip market, China's memory chips are simply not enough.
However, Samsung followed the United States in suppressing Chinese memory chips, which led to the current situation, and even if Samsung did so, the United States did not give them a good face, and the United States punished it with a fine of up to 400 billion won, accounting for two-thirds of last quarter's revenue.
Samsung's move has triggered a consensus in China's mobile phone industry chain, starting in 2023, domestic mobile phones will use domestic memory chips and OLED panels, which will reduce Samsung's ** volume and further reduce its profits.
And Samsung's production line relocation in Vietnam and India has also encountered some difficulties: Samsung's factories in Vietnam have been closed due to a strike by Vietnamese workers, and there have also been problems with the ** chain in India, which means that Samsung will have to give up the number one position in the world for the first time in 2023, when it will be overtaken by Apple.
It is clear that the United States does not see it as an ally, despite Samsung's attempts to curry favor with it. On the contrary, Samsung's market has been snatched up by American companies, which has left many of Samsung's industries in trouble, including the most American companies.
Last year, the American memory chip giant Micron made a high-profile visit to China in an attempt to once again offer first-class products to the Chinese market. Obviously, American companies know the irreplaceability of the Chinese market, and the sales of Samsung's memory chips are also declining, which is probably something that Samsung did not expect, and the current Samsung is estimated to have begun to regret it.