On January 17, Samsung Electronics announced that executives of the Device Solutions (DS) division responsible for the semiconductor business held an emergency meeting and decided to freeze the salaries of executives this year. This is the second freeze on executive salaries in nine years since 2015. Samsung Electronics explained: "Management and executives have reached a consensus that there is an urgent need to take special measures and lead by example in response to deteriorating business performance. We have decided to freeze executive compensation this year. At the same time, we are determined to improve our competitiveness and resume normal operations as soon as possible."
Samsung Electronics’ DS division’s cumulative losses in the first three quarters of 2023 exceeded 12 trillion won. Analysts said that Samsung's DS division's losses in the fourth quarter of 2023 may decrease, and the cumulative operating loss in 2023 is expected to be approximately 13 trillion won, which will become the largest loss in Samsung's history. The reason for the loss is mainly due to the reduction in IT demand caused by the global economic downturn and the decline in the prices of storage semiconductors such as Samsung Electronics' flagship products DRAM and NAND.
When Samsung Electronics' DS division loses money for four consecutive quarters in 2023 and faces its biggest operating crisis since its founding, executives will take the lead in setting an example and taking special measures to overcome difficulties.
It is reported that this is not the first time that Samsung Electronics has frozen wages. Samsung Electronics froze wages in 2009 due to the impact of the Lehman Brothers scandal, and also implemented a wage freeze in 2015 when performance deteriorated significantly.
However, the industry expects that Samsung Electronics’ semiconductor division’s losses will improve due to a rebound in storage prices starting in the fourth quarter of 2023. Hwang Min-seong, a researcher at Samsung Securities, predicts that the sales and operating profits of Samsung Electronics' DS unit this year will be 93.932 trillion won and 11.49 trillion won respectively.