Samsung's System LSI Division Faces Annual Loss Despite Record Q1 Sales

Samsung Electronics' System LSI Division reported record sales in the first quarter of this year, yet it is expected to face an annual loss. The division aims to improve profitability through the expansion of its next-generation mobile application processor, the Exynos 2700, and its image sensor business.

Park Yong-in, President of Samsung Electronics' Device Solutions (Semiconductors) System LSI Division, shared this information during a management briefing on June 18. He stated, "Although we achieved the highest sales ever in the first quarter, market changes and reduced demand make an annual loss unavoidable."

The System LSI Division is responsible for designing non-memory semiconductors, including mobile application processors like Exynos, image sensors (ISOCELL), display driver ICs (DDI), and power management ICs (PMIC).

Samsung's non-memory business continues to face performance challenges. Analysts estimate that the non-memory sector, including System LSI and foundry operations, will incur operating losses of 2 trillion to 3 trillion won this year. However, the scale of the losses is expected to decrease compared to last year, and some analysts suggest a potential return to profitability next year.

Despite the underperformance, Park emphasized that the division is making progress in securing new growth drivers. He noted, "We are accelerating the establishment of new portfolios, including sensor orders from major clients and customized SoC projects, strengthening the foundation for future growth."

Samsung is particularly focused on regaining competitiveness in the mobile application processor market with its next-generation Exynos platform.

Park stated, "The Exynos 2700 is being developed without delays, aiming for flagship model integration. We are laying the groundwork for business expansion based on next-generation wireless communication technologies, including non-terrestrial networks (NTN)."

The Exynos 2600, launched last year, received positive reviews for its performance and power efficiency in the Galaxy S26 series, and the upcoming Exynos 2700 is expected to be featured in the Galaxy S27 series, set to launch next year.

The image sensor business is also seen as a key area for improving profitability. The System LSI Division plans to reduce its reliance on the smartphone market and focus on securing new applications in automotive, industrial, and AI devices. Additionally, it aims to enter the AI data center market with its DDI and PMIC products to ensure future demand.

During the briefing, employees expressed interest not only in business strategies but also in the structure of the losses and organizational operations. The hybrid event saw participation from employees at domestic and international locations, with over 1,100 pre-submitted questions. Employees inquired about the vision for flagship SoC projects, the causes of the loss structure, and the fairness of the compensation system.

Park assured, "Management will address structural issues and create an environment where team members can focus solely on technology development. We will ensure that not only financial performance but also the value of strategic achievements is recognized."