Welcome everyone. This is Ben Suh from Investor Relations. Thank you for joining our third quarter 2022 earnings call. For additional details regarding our quarterly results, please refer to our earnings presentation, which is available on our IR website at www.samsung.com/global/ir. On the call today, I'm joined by the following representatives from each business unit: EVP Han Jin man representing Memory, VP Han Gyu-han for System LSI, EVP Kang Moon-soo for Foundry, EVP Choi Kwon Young for Samsung Display Corp, which I will call Display in the presentation, VP Kim Sung-Koo for Mobile Experience, and VP Kim Sung-Koo for Visual Display. I want to remind you that some of the statements we will make today are forward-looking, based on the environment as we currently see it.
All such statements are subject to certain risks and uncertainties that may cause our actual results to be materially different from those expressed in today's discussion. Before reviewing our quarterly results, first, I want to confirm the third quarter dividend. Today, the board of directors approved a quarterly dividend of KRW 361 per share for both common and preferred stock. Based on the annual dividend payout under the current dividend policy, the total quarterly payout is KRW 2.45 trillion, and it will be paid in mid-November. Now I will move on to the results for the third quarter. Despite a challenging business environment marked by global inflation and sluggish demand, we still delivered our highest ever third quarter revenue of KRW 76.8 trillion.
We have set new records for total revenue in a respective quarter in each quarter so far this year, and we expect annual revenue to surpass the all-time high mark that we set last year. While Memory business revenue declined as customer inventory adjustments caused our bit growth to fall short of guidance, each of the Foundry and Mobile panel businesses delivered a new quarterly record for revenue. Sales of flagship smartphones were solid, helping drive our overall revenue performance. Gross profit decreased by KRW 2.2 trillion sequentially to KRW 28.7 trillion, mainly due to the impacts of a significant price decline in Memory. Gross margin decreased by 2.7 percentage points. SG&A expenses increased KRW 1 trillion quarter- on- quarter to KRW 17.9 trillion as we continued to actively invest in R&D and increased advertising and promotional spending.
As a percentage of sales, they increased by 1.4 percentage points. Operating profit declined KRW 3.2 trillion sequentially to KRW 10.9 trillion. Display set a new record for quarterly profit, led by increased demand for major customers' new products, and MX improved its profit, thanks to solid flagship sales. However, the gains were overshadowed by weak results in the Memory business. Operating margin also decreased, falling 4.1 percentage points to 14.1%. I will now briefly review the results for each business unit. For the DS division in Memory, results declined quarter-on-quarter as customers' inventory adjustments exceeded market expectations and demand for consumer products remained sluggish, including for mobile products in China.
In System Semiconductors, profits decreased amid weak demand for mobile and TV, but Foundry delivered a record result with ongoing yield improvements in advanced nodes and increased revenue contributions from derivative processes of mature nodes. For Display, results in the mobile and panel business significantly improved both quarter-on-quarter and year-on-year with the release of major customers' new products, including foldables. Also, our differentiated technology drove increased share in a major customer's new flagship smartphones. Losses in the large panel business continued amid weak TV and monitor markets. The MX business recorded solid profitability, driven mainly by strong sales of flagship smartphones, including foldables, as well as new wearable products. MX also benefited from effective resource management in the face of continued foreign exchange headwinds.
The Network business delivered improved results led by its overseas businesses, and it secured a deal with Comcast in the United States, a testament to our continued pursuit of new opportunities. In VD, profits declined amid a combination of decreased demand and increased costs, but still, we reinforced our leadership position by expanding sales of premium products. In Digital Appliances, despite an enhanced product mix, persistent materials and logistics challenges, along with sluggish consumer demand, affected our performance. Harman delivered a record high quarterly profit, driven by strong demand for connected car technologies and solutions, and also by strong sales of consumer audio products. Regarding currency effects against the Korean won for this quarter, the positive impacts of a strong U.S. dollar on component businesses surpassed the adverse impacts of the DX division. Resulting in an approximately KRW 1 trillion company-wide gain in operating profit compared to the previous quarter.
Next, I would like to share our business outlooks. In the fourth quarter, while global IT demand and the memory market look to remain weak, we plan to keep improving earnings in Foundry and Display and continue our efforts to secure profitability in the DX division. Now for each business unit's outlook. In memory, even though we expect fundamental server demand to remain, backed by continued investments in core infrastructure, impacts of inventory adjustments are likely to persist. We will actively address the demand for high-density products and, at the same time, continue to place a priority on DRAM profitability by transitioning our product mix towards a more cost-competitive lineup. For System LSI, we expect our SoC revenue to grow following the launches of new products from our mobile customers, and we will work to expand sales of 200-megapixel sensor products.
For foundry, we anticipate that demand from our global customers will remain solid and that additional yield enhancements will help maintain earnings momentum. For display, the mobile panel business is expected to continue to grow on the back of strong smartphone demand for premium OLED panels, in which we have a clear competitive advantage. The large panel business will expand the presence of QD-OLED by capitalizing on year-end seasonality and growing our customer base. For the MX business, we will continue to focus on sales of premium smartphones and expand the sales of tablets and wearables. We expect the sales volume to grow after releasing new mass model smartphones. Even though macro uncertainties are likely to persist, we will continue to focus on profitability. Network will continue to expand overseas businesses, including in the North America and Japan regions.
For VD, our priorities are capturing demand in the premium market during strong seasonality and enhancing profitability through improving cost efficiency. Digital Appliances aims to expand revenue by increasing sales in the premium segment and online channels during the year-end seasonality, focusing on our BESPOKE lineup. Now let's move on to our outlook for 2023. We expect demand to recover partially, but macro uncertainties are unlikely to dissipate. The DS division will actively address the demand for high value-added products, expand the advanced node portion of production, and increase adoption into new application areas. The DX division will continue to reinforce our leadership and expand lineups in premium segments while enhancing user experiences by expanding multi-device connectivity for mobile, TVs, home appliances, and others based on SmartThings.
For the memory business, although geopolitical uncertainties are likely to dampen demand in the first half, we expect demand to rebound, centering on server, driven by resumed expansion of data centers. We will align our supply strategy with our midterm outlook, taking into account the limited overall production growth in the industry. In addition, we will reinforce market leadership by actively addressing the demand for new interfaces, including DDR5 and LPDDR5X, and the rising demand for high-density products. System LSI, through the reorganization of its SoC business, will be in position to bolster its competitiveness and solidify the position of our flagship products. In foundry, we will establish a foothold to narrow the gap with our lead competitor by reinforcing technology leadership in advanced nodes and increasing new orders in HPC and automotive, among others.
For display, in the mobile panel business, we will continue to focus on expected strong demand from premium smartphones and on expanding into new application areas such as IT and gaming. The large panel business will increase sales of QD-OLED by expanding our lineup and further enhancing performance while also working towards profitability. The MX business will seek to grow revenue by enhancing the product mix and expanding the sales of flagship products based on the high growth of foldable devices and increased sales of the S series. Furthermore, we will secure a solid profit margin through our efforts to continue upgrading premium large screen tablets, sustain high growth of wearables, and enhance operational efficiency. For network, we will pursue continued revenue growth with timely responses to major overseas business expansion opportunities and reinforce our technology leadership in 5G core chips and virtualized radio access networks.
VD should continue to lead the ultra-large screen and premium market segments. We will continue solidifying our industry-leading position by enhancing user experiences as we link more products seamlessly to our screens. For digital appliances, we will keep innovating highly efficient, eco-friendly products and aim to achieve revenue growth centering on the premium segment through global expansion of our Bespoke lineup. Now turning to capital expenditures. CapEx in the third quarter was KRW 12.7 trillion, of which KRW 11.5 trillion was invested in the DS division and KRW 0.5 trillion in display. The cumulative total CapEx at the end of the third quarter is KRW 33 trillion, with KRW 29.1 trillion invested in DS and KRW 2.1 trillion in display.
We expect full-year CapEx to reach approximately KRW 54 trillion, with KRW 47.7 trillion allocated to the DS division and KRW 3 trillion to display. As a reminder, the full-year numbers are projections, and the actual figures may differ depending on factors such as future market conditions and the timing of equipment deliveries. We expect memory investments to concentrate on infrastructure at P3 and P4, as well as on advanced technologies such as EUV to enhance our market competitiveness. Foundry investments will center on expanding the production capability of our Taylor and Pyeongtaek sites to address the demand for advanced processes using EUV. This is in line with our Shell-First strategy that enables swift and flexible responses to customer demand. Display will expand the capacity of flexible displays for mobile products and enhance the efficiency of large QD-OLED panel production.
Next, I would like to share some of our key activities in sustainability management. First, I would like to recap the September announcement of our new environmental strategy. This strategy contains our commitment to combating the climate crisis and our ambition to achieve net zero carbon emissions by 2050 as the world's largest IT manufacturing company. More specifically, we target reaching net zero carbon emissions by 2030 for the DX division and by 2050 for all global operations, including the DS division, though we will strive to achieve this earlier. In conjunction, we also joined the RE100 initiative, under which we will run all operations outside Korea as well as DX division on renewable energy within five years and aim to match electric power needs with renewable energy by 2050 for all operations globally.
Furthermore, we will reduce power consumption in the product use stage through the development of innovative ultra-low power consumption technologies, and we will bolster resource circularity throughout the entire life cycle of our products, from raw materials to disposal. For semiconductors, we will secure ultra-low power technology by 2025 to significantly reduce the power needs of memory products used in data centers and mobile devices. Moreover, we will apply low power technologies in major models of seven consumer products, with the goal of lowering power consumption by an average of 30% by 2030 versus comparable models released in 2019. To enhance water resource efficiency, we will endeavor to maximize water use, reuse to keep actual water withdrawals in 2030 to 2021 levels, despite the growing number of production lines at domestic semiconductor work sites.
Further, we will actively develop carbon capture and utilization technologies to help tackle global environmental challenges and reduce particulate matter. Next, on October eleventh, 2022, Samsung Electronics topped the Forbes list of the world's best employers for the third consecutive year. To compile the ranking, Forbes surveyed 150,000 workers from 57 countries. This is a meaningful and proud achievement. The recognition of our efforts on social responsibility, products and services improvements for our customers, and corporate culture enhancements for our employees. Last but not least, in September, we received the highest ranking on the 2021 evaluation from the Korea Commission for Corporate Partnership for the 11th consecutive year, an unprecedented achievement among Korean companies.
It is a recognition of our ceaseless efforts to foster win-win partnerships, not only with our primary, secondary, and tertiary partners, but also with non-partner SMEs also. We will continue to reinforce ESG management going forward. I will now turn the conference call over to the gentleman from each business unit to present third quarter performances and outlooks for their respective business segments. We will start with EVP Han Jinman of the memory business. Thank you.
Good morning. This is Han Jin Man from the Memory Global Sales and Marketing Office. For the memory market in the third quarter, amid the continuous macro uncertainties, the scale of customers' inventory adjustment exceeded market expectations and demand for consumer product continued to slow down. As a result, DRAM and bit and bit growth were both below guidance and our performance declined compared to the previous quarter. In DRAM, overall demand for servers decreased as customers reduced their purchasing budgets and strictly managed inventory levels. While some components supply issues remained. For mobile, consumer sentiment worsened amid ongoing macro issues such as inflation and COVID-19 lockdowns, and demand declined due to high inventory levels at customers. For PC, while overall purchasing sentiment weakened because of the economic slowdown, demand decreased due to inventory adjustment at major OEM customers.
In the face of a worsening slowdown in demand across the industry, we maintained a disciplined sales strategy focused on profitability, and our inventory levels increased. Consequently, bit growth was below guidance due to impacts of weak demand across the market. Next, I will talk about the NAND market. For server SSD, overall demand slowed due to component supply issues starting last year and an expansion in customers' inventory adjustment triggered by increased macro uncertainties. For mobile, although the high density portion of products kept increasing, consumer sentiment shrank due to macro issues, and demand weakened because of factors such as COVID-19 lockdowns. For client SSD, despite a continuously increasing need for high density products, memory demand decreased as SSD shipments weakened and customer inventory increased. We strengthened our product portfolio by consistently increasing the high- density portion in mobile and server OEM applications.
Our overall bit growth was below guidance due to high inventory levels at major customers and weak set demand, mainly in mobile customers, which accounts for a significant portion of our sales. Now let's move to the outlook for the fourth quarter. We expect the impact of various macro issues to continue until the end of this year, and that our customers will maintain their stance toward inventory adjustment. Even under these market conditions, we aim to deliver bit growth that exceeds market for both DRAM and NAND, mainly due to base effect, focusing on high density, high-performance products in line with the needs of our customers. For DRAM, we will maintain our strategy of prioritizing profitability by considering cost competitiveness in determining product mix.
Additionally, compared to last year, CapEx for the year is likely to increase slightly as we plan to preemptively invest in infrastructure and leading technologies to ensure readiness to meet long-term demand and strengthen our technological competitiveness. I will now go over the outlook by each product. For DRAM in server, while the shortage of some components is easing gradually, we expect fundamental server demand to remain steady given key infrastructure investment in AI and 5G, et cetera. However, our customer stance on inventory adjustment is likely to remain until the end of this year due to economic uncertainties. For mobile, we expect memory demand to pick up thanks to the mass production of new flagship and high-end models by major manufacturers.
If the economy recovers progressively toward the end of the year, we may see a rebound in demand, although we should keep checking on uncertainties such as the potential for additional COVID-19 lockdowns. For PC, while consumer sentiment continues to slow, customers are likely to remain conservative on spending as OEM companies are increasingly burdened with inventory adjustment. However, we need to observe how companies' end-of-the-year promotions affect consumption. We will keep strengthening our cost competitiveness and securing profitability by expanding cutting-edge node migration for several products, and we will also focus on preparing 16-GB-based products to cope with demand for high density products of 64 GB and higher. Moreover, we will continue to strengthen our market leadership by responding to LPDDR5X demand for new flagship mobile models.
For NAND, we expect our customers to remain disciplined on inventory for server SSD, at least until the fourth quarter, amid worries of a global economic slowdown and geopolitical issues. On the other hand, demand is solid for several OEM SSDs that are linked to the hybrid cloud trend, so we are monitoring demand relative to improvements in market conditions. For mobile, it seems that demand for high density products of 256 GB and above will remain solid, driven by a combination of new smartphone launches in fourth quarter and a continued preference for high-end models. Also, there is potential for year-end promotions to spark a temporary rebound in demand, considering the fact that recovery of consumer sentiment for IT devices is a key to set shipments. However, we need to keep track of the scale of the effect.
For client SSDs, as sluggish sellout weighed on demand from PC, inventory adjustment at customers are likely to continue. As a result, we expect effects of peak seasonality in fourth quarter to be somewhat limited. However, in terms of storage, high density demand is projected to keep increasing. We will actively respond to the demand for high performance and high density products generated by customers who strive for securing growth momentum in the market, while also capitalizing on NAND's high price elasticity to steadily unlock new demand and continue to expand market leadership. Now let's move on to the outlook for 2023. Ongoing macro issues, such as the war in Ukraine and austerity measures in various countries to deal with inflation, are expected to partially impact demand in the first half of next year.
Looking at each application, first for server, demand should improve gradually throughout the year as we expect the adoption of DDR5 for new CPUs to expand and high density trends to widen. Moreover, cloud companies are projected to resume construction of data centers that were previously delayed. However, as various micro issues have weakened demand, we will keep preparing for various scenarios and observing market conditions. For mobile, it is highly likely that demand will remain slow in the first half of the year, with consumer sentiment expected to remain somewhat sluggish on top of effects of weak seasonality. On the other hand, as we enter the second half, we believe the adoption of high density products in new models and the expansion of new form factors will partially help boost mobile demand, which has been suppressed.
For PC, similar to mobile, set inventories that accumulated due to sluggish sell-out would be depleted in the first half of the year, but we are unlikely to see a dramatic recovery in demand. If the macroeconomic stabilizes as we move into the second half, we will continue to watch for signs of improving in demand. While striving to secure a reasonable level of strategic annual supply contract, mainly with major customers, we plan to proactively address demand for products showing relatively higher demand growth, such as servers. Moreover, through our ongoing efforts to optimize our portfolio, we will also address the growing and diversifying demand of our customers in various applications.
Additionally, we'll focus on planning to link our supply operations to our midterm plans as we expect the recent increases in complexity of tech migration to cutting-edge nodes and growing lead times to constrain bit growth across the industry. Also, by responding to rising demand for new interfaces such as DDR5 and LPDDR5 and LPDDR5X, as well as for high density products, we will continue to secure our sustainable market leadership. Thank you.
Good morning. This is Kenny Han from the System LSI business. In the third quarter, System LSI earnings declined due to a decrease in demand for major components resulting from a slowdown in mobile, TV, and PC demand triggered by an economic downturn. However, SoC revenue grew, thanks to an increased portion of 5G and higher sales of products for use in premium segments. In addition, we signed a long-term supply agreement for modem products with a tier one Android smartphone customer. We reinforced the basis for mid to long-term growth for automotive associates by winning OEM orders from a number of premium European brands, including one in the U.K., and by extending strategic cooperation with them. In the fourth quarter, we expect sales in the associate business to increase due to the effects of a new product launch by the tier one Android smartphone company.
Furthermore, our new low-to-mid price assortments targeting smartphones are scheduled to start mass production, which will contribute significantly to the revenue in 2023. In addition, we expect image sensors to deliver improved earnings, with a number of smartphones featuring our 200-megapixel sensors being released in earnest. For 2023, visibility in mobile, a major application, is becoming increasingly limited due to heightened economic uncertainties. However, analysis of smartphone purchase patterns suggest that demand will continue to polarize between premium and low-priced phones. In order to respond to this divided market, we will expand sales in the volume zone while also strengthening the competitiveness of flagship products. Furthermore, we will work closely with foundries in order to smoothly supply various 200-megapixel sensors, helping ensure our major customers successfully launch flagship models. Thank you.
Hello, this is Moonsoo Kang from the Foundry business. In the third quarter, we achieved our highest ever quarterly revenue and operating profit due to steady yield improvement in advanced process and increased revenue contributions via the enhancement of matured process. Following the volume shipment of the world's first 3 nm GAA product, we will further strengthen our technology leadership by developing 2 nanometer and 1.4 nm process technology. In particular, we presented 2 nm and beyond node plan as vision for future innovation to follow GAA with introducing new processes such as backside power delivery network, which can efficiently deliver power inside the semiconductor chip to enhance performance and area reduction. In the first quarter, revenue is expected to see double-digit growth sequentially on solid demand from various applications, maximum production with optimized product mix, and increased advanced node portion.
In addition, we expect to deliver record high revenue and operating profit on annual basis in year 2022. In 2023, demand in the first half is expected to be slow temporarily due to macro uncertainties, economic slowdown, and inventory adjustment at customer side. However, since we expect to recover in the second half of the year due to the increasing production contributed by orders from new customers and continuing strong demand in HPC and automotive, we will keep momentum of steady growth on annual basis. We will focus on expanding new customer engagement in advanced nodes and enhance our presence in automotive and IoT applications by developing specialty and mature processes for stable future growth. Thank you.
Good morning. I'm Kwon Young Choi from the Corporate Strategy team at Samsung Display. I will now summarize our results for the third quarter of 2022. In the third quarter, for the mobile display business, we improved our results quarter on quarter, thanks to growth in demand attributable to launches of new models by major smartphone brands. We achieved record high quarterly earnings, thanks to our business strategy, which concentrates on premium OLED products amid increasing polarization of the smartphone markets between the low end to mid-range and the high-end segments. For the large display business, sales of QD-OLED products continued to rise, driven by expanding launches of QD-OLED monitors by global IT brands and ongoing improvements in our yields. However, the business deficit remained similar quarter on quarter due to initial investment costs.
Next, let me share the market outlook and Samsung Display's strategy for the fourth quarter and for 2023. In the fourth quarter, we expect market growth to be weaker than normal due to the sluggish consumer spending amid high interest rates and high prices, despite continued strong seasonal effects for the smartphone and IT products. However, Samsung Display will try to maintain earnings growth quarter on quarter by utilizing our competitiveness in the high-end market, in which demand is relatively stable and by capitalizing on favorable exchange rates, despite a challenging business environment. In 2023, while macroeconomic challenges may persist, we'll focus on solid earnings through preemptive investments, developments of differentiated technologies, and effective management to ensure stable quality and yield, all of which has been by delivering our differentiated results.
We'll strive to collaborate more closely with our customers to increase our OLED market share by promoting the advantages of OLED in the new application areas such as IT, automotive, and gaming, an endeavor that Samsung Display has long been preparing in order to diversify its business. In particular, in the AR/VR market, which is projected to enjoy full-fledged growth from 2023, we'll develop the technologies that our customers need, and we'll complete our upstream, downstream SDM in order to fortify our innovative leadership in the development industry. Thank you.
Good morning. This is Sung-Koo Kim from the MX business. I would like to share our results for Q3 2022 and the outlook for the MX business. In Q3, amid continued inflationary pressure and geopolitical instability, the market grew slightly compared to seasonally weak Q2. For our MX business, both revenue and operating profit increased QoQ, driven by launches of new models. As for smartphones and wearables, the new models launched in Q3 have recorded strong sales backed by smooth supply, driving solid sequential growth in revenue and operating profit. In particular, Fold4 and Flip4, launched in Q3, have made great strides compared to their predecessors, despite the challenging environment. We believe the mainstreaming of foldables is on track. Keeping pace with the foldables, the S22 series, launched in the first half of this year, also maintained solid sales momentum and saw significant YoY revenue growth.
In addition, through our continued efforts to enhance the efficiency of our resource management, we secured solid profits despite high market uncertainties, which included currency effects. Let me now move on to the Q4 outlook. In Q4, macroeconomic instability and geopolitical issues are likely to continue. We expect market demand for smartphones and wearables to increase QoQ due to year-end seasonality. As for our MX business, we will strive to sustain strong sales of flagship products such as new foldable series and the S22 series. We also seek to expand sales of Galaxy ecosystem devices, such as tablets and wearables, through various sales initiatives during year-end peak seasonality. Also, successful launches of new mass market smartphone models will help drive sales volume and further solidify our position in emerging markets.
Amid intensifying market competition and persistent macroeconomic challenges, such as currency headwinds, we will also focus on profitability through flagship-driven sales and efficient resource management. Now let me share the outlook for the next year. In 2023, the global economic environment is likely to remain unstable. We expect the smartphone market to grow YoY, led by growth in flagships, while wearables, which provide rich digital life experience and value to customers, are expected to continue to see high growth in the double digits. As for tablets, we expect the market for mid to low-priced products to contract slightly as the world transitions to an endemic and consumer demand softens. The market for premium tablets should stay solid.
To strengthen our leadership in the market, where flagships are becoming increasingly important, MX will further bolster the completeness of the flagship experience, leveraging our technology leadership to press ahead with high growth affordables and increase sales of the S series. Through the efforts, we will consistently expand our premium user base, improve our product mix, and continue flagship-centered revenue growth. As for tablets, we will continue to increase revenue by reinforcing our lineup of premium products in line with the trend toward large screens, and by enhancing the tablet experience such as features using S Pen. When it comes to wearables, we will strive to maintain high growth momentum centered on new models and outperform the market in revenue growth.
Moreover, by advancing consistent and convenient multi-device experiences based on SmartThings, we endeavor to keep enhancing the role and value of the Galaxy Ecosystem that our users enjoy in their daily lives, further solidifying Samsung as a premium brand while also boosting profitability through growth of Galaxy Ecosystem business. With these efforts, we will achieve revenue growth in 2023 and secure solid profitability supported by our continued efforts on operational efficiency to respond to unstable market conditions. Finally, we will invest with a view to the mid to long term and continue open collaboration to secure advanced technologies and build an ecosystem of future growth drivers such as digital health, digital wallet, and more. Thank you.
Good morning. I'm Young Moo Kim from the sales and marketing team of Visual Display. First, I'd like to review the market conditions and our performance in the third quarter of 2022. TV market demand increased quarter-on-quarter based on the seasonality, but it contracted year-on-year, caused by decrease in consumer confidence resulting from high interest rate, inflation, and other macroeconomic factors. For Samsung, our performance declined due to intensifying competition caused by decrease in market demand with a subsequent increase in cost and currency movement effects in some regions. However, we improved our sales structure qualitatively and further strengthened our market leadership centering on the premium segment. Now let us look at the outlook for fourth quarter and year 2023.
Although we expect market demand in Q4 to increase quarter-on-quarter due to year-end peak seasonality and global sporting events, several macroeconomic risks are likely to continue to cast uncertainties on overall TV demand. Through strategic partnerships with major channel partners, Samsung will proactively utilize sales opportunities such as Black Friday and global sporting events to capture peak season demand with high value-added products such as Neo QLED, super big and Lifestyle screen. We also focus on securing profitability through optimized operations and efficient cost management. Regarding the TV market in 2023, along with various external sensitivities that are expected to carry over into 2023, overall TV demand is projected to remain stagnant. Demand for premium products, including Super Big TVs, should keep growing.
We will continue to innovate premium products and lead the ultra-large screen market, while also strengthening sustainable eco-friendly management and providing new customer experiences that connect screens and various products, all to further solidify our position as an industry leader. Thank you.
That sums up the third quarter results presentations. Before we move on to the Q&A session, I would like to share several data points in key business areas. Comparative figures are on a sequential basis for quarterly data and a full year basis for annual data. For DRAM in the third quarter, our bit growth declined by a percentage in the high teens, and ASP fell by around 20%. For the fourth quarter, we expect market bit growth to be in the high single digit range, and our bit growth should be above market. On a full year basis, market bit growth and our bit growth should be similar in the low to mid single digit range. For NAND in the third quarter, our bit growth decreased by a percentage in the high single digits, while ASP saw a decrease in the low 20% range.
In the fourth quarter, we expect market bit growth of a mid-single-digit %, and we should be above market. For the year, we expect market bit growth to be in the mid-single-digit % range, and our bit growth should be similar. For display in the third quarter, the mobile portion of revenue was a percentage in the high 90s %, and sales volume declined by a percentage in the mid-single digits %. In mobile in the third quarter, shipments were approximately 64 million units for smartphones and 7 million units for tablets. Smartphone ASP was $282. For the fourth quarter, we expect shipments of smartphones and tablets to rise, but smartphone ASP is likely to decline. For TVs, sales volume in the third quarter increased by a percentage just into the double digits %.
For the fourth quarter, we expect sales volume growth to be in the high 20% range. On a full year basis, sales volume will likely decline by a percentage in the low single digits%. I will now move on to the Q&A session. First, we will start taking questions from the conference call.
The first question will be presented by Peter Lee from Citig roup.
I have two questions. The first question is about the overall company inventory. We're noticing that two quarters in a row, the company's inventory has significantly increased. Can you give us some details about the reasons and how you plan to address the increased inventory? Second question is about the mobile, the smartphone business. Overall, there's been issues regarding certain supply of parts and also increased intensity of competition. Considering all of that, can you give us, first of all, the smartphone market outlook for next year, how the company plans to secure the MZ, the generation MZ customers, and also your strategies regarding expanding sales of your flagship models?
To your question about the inventory, to just give you the inventory at the corporate level, third quarter inventory was KRW 57.3 trillion, and this is a KRW 5.2 trillion increase quarter-over-quarter.
As we mentioned before, a part of that is the DX inventory, where we have, during the first half of this year, been expanding our inventory in order to ensure stable supply of our products despite the disruptions in the global supply chain. As we mentioned during the last call, the DX-related inventory is continuing to stabilize during the second half of this year. That is why most of the inventory increase that occurred in the third quarter is related with the Memory Business, and therefore, Mr. Han Jin-man of the memory division will be answering your question further.
To answer your question, from the memory side, we are aware that there is concern in the market about our higher level of inventory due to worsening market conditions.
Yes, I agree that it is a fact that our inventory levels have increased due to weak demand driven by various macro issues this year. That said, I do like to emphasize once again that we have to consider the change in the production constraints, especially in the case of DRAM. We're seeing longer equipment lead time. Also, node migration is becoming more and more difficult. Also, there's a chip size penalty that occurs with the expansion of DDR5 production. We think that there is a greater amount of production constraint on bit growth. We would start to see and feel this impact starting gradually from next year.
That is why, considering all of that, we actually think that the level of balanced inventory should be set higher than past levels, in order for us to be in a good position to effectively capture market demand. That is why I think that it is a bit unreasonable to judge current inventory levels using past yardsticks. That said, the customers' inventory adjustments that happened in the third quarter did go beyond what was originally expected, and our inventory did rapidly increase during the third quarter. We are continuing to work to manage our inventory to balanced levels.
First of all, to answer your question about smartphone market outlook next year, we do think that the smartphone will be...
smartphone market at a general level will be able to grow slightly on a year-on-year basis, and that the flagship segment would actually record a higher growth rate than overall smartphone market. Accordingly, we will be focusing our growth strategy next year around the flagship segment, that is further expand the foldable and also provide even better and enhanced S, Galaxy S series that embodies all of the innovation and values that we pursue. I think what is also important in the smartphone business going forward is to understand that there is a shift from a smartphone standalone to an ecosystem experience emphasis. That is why we are also providing or working on providing a more consistent experience across all Galaxy devices based on One UI.
Also provide services that users find very useful in their everyday lives, such as digital wallet and digital health, in order to provide customers a more rich and enjoyable digital life through our offering. You've also asked about how we plan to appeal to the Generation MZ, and I think we can do that in two main directions. One is design and the other is in terms of marketing. In terms of design, the key word would be essential design identity. This concept focuses on simplifying just the key factors in the design, but then achieving a higher level of completeness in the details. Also, developing new colors for our devices would be a way of capturing women as well as Gen MZ users.
In terms of marketing, in order to appeal to the younger generation, we will emphasize social media communication that showcases the Galaxy experience within the everyday lives of our customers. Also emphasize our ESG activities, for example, by adopting eco-friendly material on our products, which are values that the MZ Generation feels are important. Also, we will be highlighting our security functions such as the Samsung Knox metrics.
The next question will be presented by Nicolas Gaudois from UBS.
Thanks very much for taking my question, and good morning. This question is about memory. Unlike some of the prior cycles, it appears that all major memory makers have taken early steps to reduce bit production growth, including lowering wafer starts or wafers out, reduced CapEx and wafer equipment spending budget into next year, and delayed tech migration. Could you add some color on what you are doing on your side? Thank you.
I recall that it was in early October, it was at the Tech Day event held in the U.S. when I said that we're not considering any artificial reduction of production, and I have felt that comment did attract quite a lot of attention. First of all, I would like to say that we stand behind that position, that we're not considering any artificial reduction in our production, and I think I can go into a bit more detail about what I mean. As we mentioned during the speech, there is weak demand, and we think that the current weak demand is explained, number one, by the macro issues that are currently persisting, as well as the inventory adjustments that the customers have been going through.
The magnitude of that inventory adjustment has been larger than what was expected. Looking towards next year, there are plans for increase of server data centers, and we do expect there to be a greater adoption of DDR5, coupled with a new CPU. There are actually some third party sources that are saying that they expect the second half market to improve around DRAM next year. Given that, what we're looking at is even the strategical level of operation that I was explaining in the previous question, answer to the previous question.
Even though we agree that the current market demand is contracted, if we think at a strategic level, we do see that there is a need for us to be prepared for demand recovery from a mid- to long-term perspective. That is why when we say that we are not considering any artificial reduction in production, it means that we're not considering artificial reduction of production for the sake of short-term supply and demand balance. That said, we are carefully watching the possibility of any rapid changes in the market situation.
CapEx 관련해서 말씀드리자면 저희가 중장기 수요 대응을 위해서 적정 수준으로 인프라 투자는 지속한다. 그리고 업황과 연계해서 설비 투자를 유연하게 운영한다. 이 투자 기준은 항상 말씀드리지만 동일하고요. 이를 통해서 저희는 지속 가능한 sustainable한 이익 기반을 만들어 나가려고 합니다. 그런데 제가 CapEx에 대해서 추가적으로 말씀드리고 싶은 부분은 올해나 혹은 내년에 CapEx 투자가 이게 directly 그 다음 해 내년에 빛 생산으로 직결되지 않는다는 점인데요. 이런 생각을 하면 중장기적 수요 대응을 위한 현재 인프라 투자는 이런 기반으로 기존 계획대로 진행하려고 하는 겁니다.
To give you a bit more color about CapEx, we still stand behind our overall CapEx policy, which is to continue an appropriate level of infrastructure investment for responding to mid- to long-term demand, but flexibly operate our equipment investments to be in line with industry situation. That is how we are able to create a sustainable foundation for profits. Regarding CapEx, this year as well as next year, what we need to keep in mind is that CapEx spending this year or next year does not directly lead to a bit production the following year. And that is why we plan to stand behind our original infrastructure investment plans, which will enable us to respond to mid- to long-term demand.
올해 투자에 대해 좀 더 부연설명 드리자면, 설비투자의 경우는 저희가 업계 최초로 D램에 EUV 적용한 이후에 15나노 제품부터 EUV 전면 적용했고요. 선단 기술 적용을 위한 투자가 상대적으로 큽니다. 특히 Pyeongtaek P3와 P4를 위한 이 대규모의 인프라 투자가 진행되면서 작년 대비 CapEx가 증가했습니다. 원화 기준으로는 CapEx가 작년 대비 상승한 것으로 보이는데요, 환율 상승을 따져보고 달러로 환산하면 조금 감소할 것으로 예상됩니다.
Also to give you some more color on our CapEx spending this year. As you know, we were the first to adopt EUV in DRAM, starting from 15 nm, and we have been rolling out EUV going full EUV to advanced nodes. That is one of the reasons why we have a relatively large equipment CapEx size. On top of that, we have been going through a large scale infrastructure investment in P3 and P4, and that explains why our CapEx this year has increased versus the previous year. Now, even that increase in CapEx year-over-year is on a Korean won basis, which does reflect the strong dollar. Therefore, if you convert our CapEx spending this year to dollar terms, actually it appears to have decreased year-over-year.
내년 투자는 계속 말씀드린 대로 매크로 이슈, 그다음에 시황 불확실성이 커서 중장기적인 관점에서 여러 신호에 의한 시나리오를 가지고 논의하고 있고요. 다만 앞으로 중장기 수요에 대응하기 위해서 클린룸 확보를 위한 인프라 투자가 이미 예정되어 있기 때문에 설비투자 조정으로 인해서 전체 CapEx 변동폭은 제한적이지 않겠냐, 이렇게 보고 있고요. 다시 한번 말씀드리지만 이 CapEx 숫자만으로 단기 생산이나 공급을 전망하는 것은 예전만큼 의미가 있다고 보기는 힘들다고 생각합니다. 감사합니다.
Since we're on the topic of CapEx, if we look towards next year's investments, we're currently discussing next year's CapEx plans. We're actually considering various multiple scenarios in the mid- to long-term, given the high level of market uncertainty and also various macro issues out there. That said, as we mentioned, because we are planning to stand behind our original infrastructure investment plans to get the clean rooms ready for mid- to long-term demand. The only room for adjustment for our CapEx plan next year would be within the equipment investment, which would be a limited amount of flexibility there. Once again, I would like to emphasize that regarding CapEx, the total overall CapEx number is not as relevant in forecasting short-term production and supply as it was before.
네, 답변 감사합니다. 다음 질문 받겠습니다.
다음으로 질문해 주실 분은 HSBC의 서주일 님입니다. The next question will be presented by Ricky Seo from HSBC.
질문 기회 감사드립니다. Display하고 NAND 쪽 질문드리겠습니다. Display 쪽 먼저 드리면 최근에 QD-OLED TV하고 모니터 출시하셨는데, 고객사, 메인 고객사 반응하고 전반적인 시장 반응이 어땠는지 설명해 주시면 감사하겠고요. 그다음에 올해 내년도 판매 계획, 최근에 CapEx Capa를 조금씩 늘린다고 얘기하셨는데, 이 QD-OLED 테크놀로지가 메인스트림으로 향후 쓰실 건지 궁금합니다. 그다음에 두 번째는 NAND 전략 관련해서 NAND 시장은 전반적인 메모리보다도 더 심하게 지금 안 좋아 보이고요. 경쟁도 심화되고 있는데 물론 가격 탄력성이 좀 있긴 하지만, 이런 좀 악화되고 있는 NAND 시장에서 우리 삼성전자의 대응 전략이 어떠한지 궁금합니다.
Oh, I have two questions. The first question is about the QD OLED. You've launched the QD OLED TV and monitor. Can you give us some initial customer and market responses to the QD OLED-based products? I've also been hearing that you are planning to increase capacity going forward. Does that mean that you are planning to take QD OLED as your mainstream technology? Second question is about the NAND market. The market situation in NAND is even worse than memory, and competition is becoming even more fierce. Even though NAND does have a price elasticity, the situation is deteriorating, and I would like to know how the company plans to respond to the deteriorating NAND market conditions.
Well, to answer your question about the QD-OLED, the QD-OLED that we had launched earlier this year as our response to the premium large display market has received very positive responses from customers as well as end consumers. We have also launched the QD-OLED-based monitor in the second half, and therefore we are very well positioned to significantly increase our QD-OLED business next year. We had closed down our LCD operation in the first half, and this was in part to concentrate our resources on the QD-OLED. This has worked. Our yield is rapidly climbing, and we have also been diversifying our customer base and product lineup.
What we're noticing in the market is that since the pandemic, the consumers are having a stronger demand for high quality displays, a smartphone level high quality display, even in large displays, so that they can watch videos and also play games even on a large size display as if they are doing on a smartphone. That is why we think that given this market demand, we will be able to significantly increase sales volumes and expand our market share starting from next year. Regarding additional investment plans, given the uncertainty in the market, we are looking into additional investment plans while closely collaborating with our customers and also carefully watching market demand so that we are able to supply demand without disruptions.
Regarding your question about NAND, yes, we agree that compared to DRAM, the possibility of market conditions improving, recovering next year is relatively low for NAND. That is why we also feel the need to manage our NAND inventory levels to balanced levels. As you know, in NAND, Samsung has a very favorable cost competitiveness, and by leveraging the price elasticity that you've mentioned, we are planning to preemptively create demand for NAND.
그 다음에 storage나 이 server 쪽에서도 이제 16테라바이트 SSD 이런 needs가 지금 확인되고 있습니다. 저희는 이제 원가 절감 노력은 당연히 계속 할 거고요. 포트폴리오도 좀 다양하게 해서 그리고 고객들하고 협업도 해서 이제 NAND 시장은 계속 창출하는데 이 focus를 둘 생각입니다. 이런 노력을 통해서 좀 더 다양한 응용처에서 이 고용량 시장이 더욱 확대될 것으로 이제 기대하고 있습니다. 감사합니다.
We also agree that the market conditions are challenging, but also we actually sense that at the end user level, there's a relatively strong demand for storage and solution products, especially the higher density products. For example, you would notice that in the market, even the low-end smartphones now have around 256 GB of content. Flagship models are now ranging from 512 to, well, 512 GB to 1 TB of content. Even storage and servers actually, we've confirmed that there is a need for up to 16 TB. We will be focusing, in the case of NAND, on market making, creating markets continuously, by continuing to reduce our cost base internally and also collaborating with customers based on our wide range of product portfolios.
We will use this as an opportunity to further expand our position in the large density market and across various applications.
네, 답변 감사합니다. 다음 질문 주십시오.
다음으로 질문해 주실 분은 신한투자증권의 최도연 님입니다. The next question will be presented by Doyeon Choi from Shinhan Securities.
네, 안녕하세요. 저는 신한투자증권 최도연입니다. 질문 기회 주셔서 정말 감사드리고요. 저는 foundry 관련된 질문 한 가지 드리고 싶은데요. 먼저 foundry 사장 취임을 직접 축하드리고요. 이제 macro 영향으로 이제 foundry 시황에 대한 전망도 좀 많이 엇갈리고 있는 것 같아요. 생각도 많이 다르게 엇갈리고 있는 것 같은데. 2023년 그리고 중장기에 대해서 foundry 시황을 삼성전자는 어떻게 예측하고 계신지 좀 공유해 주시면 감사하겠고요. 그리고 이제 관련해서 삼성전자의 향후 단기든 중장기에 대한 대응 전략에 대해서도 공유해 주실 수 있으면 정말 감사하겠습니다.
I have a question about Foundry. I think there's some different opinions about what the Foundry market outlook would be. I wonder what your outlook is for Foundry market conditions next year and also in the mid to long term, and how does Samsung plan to respond to that market outlook?
Foundry 시황 관련해서 답변드리겠습니다. 우선 2023년의 경우, 글로벌 경기 둔화 영향으로 해서 상반기까지 단기 구간에는 수요 불확실성이 있습니다. 하지만 하반기에는 적체된 재고의 소진, 그리고 HPC, auto 등 응용처의 수요 견조로 저희는 회복될 것으로 전망하고 있습니다. 이것은 저희가 가지고 있는 고객 수요 데이터에 의한 전망입니다.
First, our market outlook for foundry next year is that there will be demand uncertainties at least until the first half due to continued slowdown in global economy. Based on the customer demand data that we currently have, we expect the foundry market to improve next second half as the inventory is consumed and also demand becomes solid around key applications such as HPC and automotive.
다만 그 macro 경제의 침체가 장기화할 불확실성도 존재하기 때문에 당사는 시장을 면밀히 관찰하면서 대응 전략을 세우고 있습니다.
Even though that is the outlook we have based on our customer demand data, there is still a possibility that the macro economy may not have a soft landing. Given that uncertainty, we continue to carefully monitor the market and have prepared strategies regarding that.
중장기 관점에서 보면, 선단 공정의 수요는 주요 응용처, 특히 HPC 중심으로 지속적으로 견조할 것으로 예측하고 있고요. 그래서 당사는 선단 노드에서 투자, 신속한 ramp up을 위한 multipath 구축, 그리고 수율 개선, 그다음에 고객사의 multi-vendor 전략 활용 등으로 선단 공정에서 market share를 더 확보하기 위해 계속 노력할 것이고요. matured node에서도 고객 맞춤형 value added 공정 개발로 수요에 탄력적으로 적극 대응할 계획입니다. 감사합니다.
Now, regarding the mid to long term foundry market outlook, we do think that especially in the advanced nodes, demand in the mid to long term will remain solid. That's why we will be focusing our resources on the advanced nodes in terms of investments, creating multipath for rapid ramp up, improving yield, and also carrying and leveraging the customer's multi-vendor strategy. We'll be focusing on increasing our market share around the advanced nodes, but also in terms of the matured nodes, we will respond flexibly to customer demand by developing customized value-added processes.
네, 답변 감사합니다. 다음 질문 받겠습니다.
다음으로 질문해 주실 분은 다이와 캐피털 마켓의 김성규 님입니다.
안녕하세요. 질문 주셔서 감사합니다. 저는 메모리 쪽 그리고 디스플레이 쪽에 두 가지 질문이 있습니다. 우선 메모리는 수익성 관련된 질문입니다. 3분기에 보면 우리 메모리 사업부의 이익이 큰 폭으로 하락을 한 것으로 보이는데요. 지금 메모리 가격 하락세가 심화되고 있고, 오늘 한 부사장님이 말씀하시는 거 보면 CapEx라든지 NAND 플래시 쪽에 상당히 적극적인 톤으로 말씀하시는 것 같은데, 이 수익성 확보 측면에서 문제는 없는지 이런 의견을 부탁드리고 싶습니다. 디스플레이 관련해서는 3분기에 상당히 호실적을 달성하셨는데요. 이 중소형 OLED 사업에서 경쟁사 대비 이렇게 월등한 실적을 달성하신 배경이 뭔지, 그리고 스마트폰 시장이 정체되고 있는데, 경쟁사 공급 증가나 이런 상황을 감안할 때 향후에도 호실적이 달성 가능한지 의견 부탁드리겠습니다. 감사합니다.
I have two questions. The first question is about the memory division. We noticed that the memory division's third quarter profitability has decreased significantly overall in the market. ASP is declining, but on the other hand, today, you seem to be very confident and proactive about your go-forward CapEx plan and how you plan to address the NAND inventory. Would that have any negative impact on the profitability of the division going forward? Second question is about the display. I do notice that you delivered very strong results in the third quarter. Especially, it seems your small to mid-size OLEDs have overperformed quite significantly competition. That is quite noticeable, but given that overall smartphone market is expected to be stagnant, do you think such significant outperformance can be sustained?
메모리 사업이 시장 환경이 변화하면서 수익성의 등락이 발생하지 않습니까? 지금은 다소 수익성이 하락하는 시기인 것은 사실입니다. 수익성에 영향을 주는 요인이 여러 가지 있는데, 그중 가격의 경우에는 저희가 컨트롤 할 수 있는 영역이 아니지 않습니까? 그래서 저희의 기본 전략은 예상치 못한 상황에서도 안정적으로 수익성을 확보하기 위해서는 원가 경쟁력을 강화해야 된다는 것입니다. 그래서 원가 경쟁력 강화하는 데 주력하고 있고요. 그런 노력을 한 결과 DRAM이나 NAND, 둘 다 업계에서 아마 압도적 경쟁력을 가진 원가 구조를 갖고 있다고 말씀드릴 수 있고, 이 점은 저희의 강력한 장점이라고 자부합니다.
As you know, the memory business, the market environment changes, and with that, the profitability also goes up and down. Right now, I agree that we are in a period where profitability is on a declining trend. The other factors that impact profitability of a memory business, the price is a factor that is beyond our control, and that is why we have always emphasized cost competitiveness as a way of us ensuring stable profitability regardless of what situation unfolds. As a result of our focus on cost competitiveness, I can say that in the industry we have a cost structure that is by far superior than any competitor, and this is a huge and powerful strength to have.
최근에는 저희 고객사들의 요구가 다변화되고 있고요. DDR5, 그다음에 LPDDR5X 이런 신제품 시장이 점점 확대가 되면서, 이런 제품군에서는 Product Mix가 정말 중요해지고 있습니다. 그래서 이런 고부가가치, 고용량 제품 중심으로 Mix를 좀 선제적으로 조정을 해서 저희 Customer 수요에 차질 없이 대응하고, 그다음에 여기에 따라서 수익성까지 이제 확보할 계획이고요. 저희는 이런 급변하는 시장 환경에서도 사업이나 미래를 위한 투자, 이런 투자를 지속할 수 있는 수익성 확보하는 게 중요하기 때문에 다각도의 노력을 하고 있고, 덕분에 비교적 어려운 환경이지만 양호한 수익성을 유지하고 있습니다. 네, 감사합니다.
We're also noticing that, unlike before, the customers' demands are becoming more diverse. That's why having the right product mix planning across various product groups is becoming that much more important, especially as new product markets, such as DDR5 and LPDDR5X, expand. By having the right product mix planning, we're able to capture the customer demand, especially around the high-end and high-density products. This is another way for us to secure profitability by capturing the demand without missing any of it. We do notice that it is a rapidly changing market environment, but our focus has always been to secure sufficient profitability that would enable us to sustain our investment program for future businesses.
Because we have maintained that position, despite the difficult environment we currently see, we have been able to maintain good profitability.
디스플레이 부분 답변드리겠습니다. 질문하신 게 3분기 저희가 양호한 실적을 달성한 것과 이게 이제 지속 가능한 것인가라는 질문을 주셨고요. 말씀하신 것처럼 저희 다행스럽게도 어려운 환경에도 불구하고 저희가 3분기 경쟁사 대비 양호한 실적은 이어나갈 수 있었습니다.
이러한 경영실적을 이어 보일 수 있었던 부분에 대해서는 여러 가지 요인이 있겠지만, 그중에서 한두 가지 정도가 가장 크게 영향을 미치지 않았나 이렇게 판단하고 있습니다. 첫 번째는 시장의 변화라고 보고 있습니다. 과거는 대부분 디스플레이 시장의 모든 제품들이 비슷한 사이클로 이렇게 같은 방향으로 움직였는데, 최근 들어서 그런 애플리케이션 그리고 세그멘트에 따라서 수요가 좀 변동을 하고 있는 상황입니다. 그런 상황에서 저희가 모바일 그리고 프리미엄 그런 OLED 사업에 집중한 것이 당사 실적에 안정적으로 결과를 가져오는 그런 결과를 기여하지 않나 이렇게 판단하고 있고요. 그리고 이러한 고객들이 원하는 그런 프리미엄 OLED 기술을 저희가 적기에 만들어서 공급할 수 있었던 당사의 기술력과 양산 경험이라고 생각을 하고 있습니다.
당사가 사실 가장 오랫동안 OLED 기술을 해왔고, 그렇게 축적된 노하우, 그리고 고급 인력들, 뭐 이런 것들이 경쟁력으로 작용하면서, 저희가 시장에 경쟁력을 갖지 않을까 그렇게 생각하고 있고요. 그중에서 특히 저희가 선제적으로 투자했던 규모의 경제가 또한 크게 기여하지 않나 이렇게 판단을 하고 있습니다.
To answer your question about the mid to small size OLED. Yes, we have achieved quite a strong performance in the third quarter versus competitors. You've asked whether that will be sustainable. Our strong performance in the third quarter, we attribute to two main factors. One is a change in the market. In the past, I think the display market moved in sync regardless of application. However, recently we're seeing a divergence of demand patterns across different applications and segments, and our focus on mobile and premium OLED has been one of the reasons why we were able to produce stable business results. The second reason of our stronger performance is explained by our outstanding technology and mass production capabilities that has enabled us to produce and supply the OLEDs that customers want on time.
As you know, we have a very long track record of producing OLED. We have the technology, the know-how, and very experienced experts in-house that has provided us with a competitive advantage. Also on top of that, having made the preemptive investments has given us the benefits of economies of scale. This, I believe, is now showing up in visible results.
그리고 이러한 올해 그런 좋은 실적들이 내년, 특히 사분기, 내년에 계속 지속될 수 있느냐라는 질문에 대해서는, 사실 저희도 매우 우려하고 있고, 철저하게 준비를 하고 있는 상황입니다. 특히 이제 시장의 침체가 심화되고 그리고 경쟁이 격화될 경우에 당사도 이 영향에서 완전히 자유롭다고 판단하지는 않고 있고요. 다만, 당사는 아까 말씀드린 것처럼 그런 요인들은 여전히 지속 가능하다. 즉 말하자면, 하이엔드 세그멘트의 그런 당사의 경쟁력, 그리고 기존에 가졌던 저희가 노하우, 그런 양산 역량들, 그리고 규모의 경제를 통한 온갖 경쟁력 등은 여전히 지속 가능하기 때문에, 저희가 지속적인 경쟁 우위를 만들어 갈 수 있기에는 좋은 환경이고, 그렇게 만들어 갈 수 있도록 최선의 노력을 다하겠습니다. 감사합니다.
Regarding whether our advantage and our performance is sustainable. We are looking at next fourth quarter and next year markets with great concern. It may be a very challenging market and if the market deteriorates further from now, it may be difficult for us to stay immune from the challenging market conditions. That said, we believe that even if the market becomes more challenging, the advantages I have just described would still remain valid. Our advantages being the focus that we have placed on the high-end segment, the OLED technology, and know-how that we have, our capabilities in mass production and execution, and also the cost competitiveness we have achieved by the preemptive investments and achieving economies of scale would still remain valid.
We are confident that even if macro-environments become more challenging, we would be able to deliver strong results.
네, 답변 감사합니다. 그럼 시간 관계상 컨퍼런스콜 질문을 하나만 더 받도록 하겠습니다.
마지막으로 질문해 주실 분은 KB증권의 김동원 님입니다. The last question will be presented by Kim Dong-won from KB Securities.
질문 기회 감사드립니다. 저는 메모리와 가전의 질문드리겠습니다. 먼저 전기차 시장이 확대되는 가운데 전장용 메모리 수요 영향에 대해서 궁금합니다. 향후 삼성전자의 Automotive Memory 사업 전략에 대해 의견 부탁드리겠습니다. 다음은 VD 질문입니다. 내년 TV 수요 전망에 대해서 공유 부탁드리고요. MICRO LED와 Neo QLED, QD-OLED를 포함한 차세대 프리미엄 TV 성장 전략에 대해 말씀 부탁드리겠습니다. 감사합니다.
My first question is about the EV memory market. The overall EV market is expanding, and so will the EV memory market. What is your EV memory market outlook and your business strategies regarding the automotive memory business? Second question is about the TV. Next year, what is the company's TV demand outlook for next year? And there are various different technologies in the premium next generation premium TV segments, such as MICRO LED, Neo QLED, and the QD-OLED.
First of all, I would like to thank you for asking a question that is not about short-term market situation, even though I agree that the current market situation is challenging.
I think these are the times when we actually need to focus more on developing new demand sources and applications, and I think your question actually hits on that point. We have been expecting the importance of automotive semiconductors to increase in line with the growth of the EV market, and that is why we have been implementing a mid to long-term strategy to address that. Regarding the EV market, you would have noticed that the EV market has been exponentially growing since around 2020. Also, per vehicle, we're not only seeing increase in memory content per vehicle, but also the memory that is being used on vehicles, the specification itself is being raised. Also, when we think forward, when there are more autonomous vehicles out there, we can think of, for example, a data center that will be necessary for these vehicles.
That would also be another source of demand. We think that by around 2030, automotive may become one of the three main pillars of applications together with server and mobile. Since we first started to supply memory to automotive applications, we've actually been recording new revenue records for seven consecutive years, based on a very strong relationship and trust from the customers. This is because initially we have placed a special focus on technology and quality, such as LPDDR4X and high density UFS or high capacity UFS 2.1. Going forward, we will focus on preemptively expanding the automotive product lineup we have, especially around the high performance and high specification products such as LPDDR5X, GDDR7, and server class SSD.
The concept that we have is server on wheels for automotive applications, and we will make this into a reality. Regarding the automotive semiconductor market, we plan to actively contribute to its growth by focusing on quality and also safety.
Regarding the TV market outlook next year, while the overall TV market is expected to be somewhat stagnant as the various internal and external risks continue into next year, we think that within the TV market, the ultra-large and premium demand will continue to grow. Looking towards next year under that market outlook, we will continue to maintain our sales strategy focused on the premium segment, especially focused around the Neo QLED. Also in order to provide consumers with a wider range of choice, we will strengthen the sales competitiveness around OLED.
또 초대형 98인치 프리미엄 TV와 함께 초고가 신규 시장 수요 창출에 앞장서도록 하겠습니다.
Also, next year, we will also start to boot up sales of MICRO LED, which is currently the top level display technology yet. We will implement this into various sizes and provide differentiated customer experiences to increase sales. Overall, next year, we will focus on actually creating a new market demand around the ultra-high-end segment, together with the ultra-large-size 98-inch premium TV.
예, 더불어서 글로벌 파트너사들과 적극적인 협력을 통해서 양질의 콘텐츠와 서비스를 제공하고, 또 스크린과 다양한 제품들의 연계로 새로운 고객 경험을 제공하는 등 글로벌 TV 시장을 지속 선도해 나가도록 할 예정입니다.
Together with these new products, we will focus also on providing high quality content and services by actively cooperating with global partners and also providing new customer experiences by connecting the TVs with other screens and various products, in order to maintain the leadership we have in the global TV market.
네, 답변 감사합니다. 그럼 마지막으로 저희가 온라인을 통해서 사전에 취합한 질문에 대해 답변드리도록 하겠습니다. 잘 아시겠지만 저희가 지난해부터 개인투자자들과의 소통 강화 및 이해 제고를 위해서 홈페이지를 통해서 사전 질문을 받도록 하고 있고요. 이번 분기에도 많은 분들께서 다양한 질문을 남겨주셨습니다. 이 중, 역시 대부분 앞서 진행된 질의응답 과정에서 설명이 된 것으로 보이며, 거론되지 않은 질문 중에서 주주들의 관심도가 높은 한 가지 사안에 대해 추가적으로 답변을 드리고 마치도록 하겠습니다. 그 질문은 저희 그 모바일 사업 관련해서 당분간 달러 강세가 계속될 것으로 전망되는 상황에서 원자재 및 물류비 하락 가능성 및 두 자릿수 이상의 수익성 확보를 위한 방안에 대해서 설명을 부탁드립니다 였습니다. 여기에 대해서는 MX의 김성구 상무가 답변해 주시겠습니다.
Well, we will now answer questions that were submitted online in advance. As you know, we have been accepting questions via our website in advance of the earnings release as part of our efforts to strengthen communication with individual investors and enhance understanding of the company. We've received a wide variety of questions for this quarter. I believe the majority of the questions were sufficiently answered during the Q&A session, and so we will answer one more question on a topic that garnered a high level of interest from our shareholders, but were not addressed during the Q&A session. The question addresses our mobile division. The question was, the strong U.S. dollar is expected to persist for some time being. Considering that, what is the possibility of raw material prices or logistics costs decreasing?
How do you plan on securing a double digit profitability?
원자재 같은 경우는 메모리 이외에는 아직 visibility가 충분하지 않고, 물류 비용 부담은 코로나발 항만 운송 트래픽이 좀 해소되면서 완화되고 있는 측면이 있습니다. 다만 환율 약세 영향이 여전히 강할 것으로 보입니다.
Well, on the raw material side, other than memory, the visibility is still low for other raw materials. For logistics cost, the situation has eased somewhat, especially as the port traffic congestions that were caused by COVID has been eased. That said, the impact of the weak Korean won, the strong dollar, is expected to be quite strong.
2023년 어려운 시장 상황이 되겠지만, flagship 시장은 여전히 성장이 예상되기 때문에, 저희는 flagship 제품에 역량을 집중해서 고객 경험 완성도를 더욱 끌어올리고 브랜드 가치를 더욱 키워서 제품 믹스 ASP도 개선시키는 전략을 더욱 강하게 추진할 계획입니다. 또한 태블릿, 웨어러블까지 seamless하게 연결되는 Galaxy Ecosystem 경험을 더욱 확장시키고, 더욱 고도화해서 고객이 체감하는 저희 제품의 가치를 올리고, 비용 측면에서는 개발, 제조, 물류, 판매 전반에 걸친 운영 효율화 노력을 더 해서 견조한 수익성을 확보할 수 있도록 노력하겠습니다.
Even though the market outlook next year is expected to be challenging, we think that within the overall mobile market, the flagship segment will continue to grow. That is why next year we will continue to focus our resources on the flagship and premium segment. We will focus on providing an even more complete customer experience, enhancing our brand equity, improving our product mix as a way of improving our ASP. Also, in addition to the smartphone itself, we have to look towards the Galaxy Ecosystem experience, that provides seamless connection between our smartphone, tablet, and wearable.
This is an opportunity for us to not only provide greater value to our customers, but also is a way of us to improve our profitability, and we will further improve our profitability or make our profitability more solid by improving our operational efficiency across development, manufacturing, logistics, and sales. By these internal and external efforts, we plan to secure solid profitability next year.
네, 답변 감사합니다. 저희는 투자자 여러분들의 소중한 의견에 감사드리며, 주요 경영 의사결정에 참고하도록 하겠습니다. 그럼 이것으로 이번 분기 conference call을 마치도록 하겠습니다. 여러분과 가족분들의 건강과 안전을 기원합니다. 감사합니다.
I would like to thank everyone who shared their valuable opinion, and we will be sure to refer to them in our decision making process. That completes our conference call for this quarter. We wish all of you and those close to you stay strong and in good health. Thank you.