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Samsung posts brutal financials as chip business profits plunge by 94%
(www.techspot.com)
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this post was submitted on 02 Aug 2025
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Where did the $4.64 billion a year ago profit in the chip division come from? I don't remember any major customer wins in 2024 and one would think with Samsung fabbing the Switch 2 SoC, there would be an increase in absolute profit values (if not margins).
Maybe last year is when the contract for the Switch 2 was signed and paid?
I don't have professional experience in semiconductor contracts, but it seems unlikely that an upfront payment format would be used; I would assume payments (i.e. revenue and profit) would be tied to quarterly unit delivery figures (more in Q3/Q3 to cover season demand peak).
Perhaps this is tied to intra-company transactions (decline in Exynos fab orders?); but I would still think Switch 2 SoC should have a positive impact on current profit. They didn't just sign a contract on near break even terms, did they? :)
I was thinking it may be a mix of both, an upfront contract last year, and continual payments
Unless someone with experience in such contracts is using Lemmy (and reading this community), we can only speculate. :)
It’s quite likely that Switch 2 have been in production for a couple of years already given massive stockpiles they had for release. There’s plenty of circumstantial evidence that they delayed Switch 2 because Switch 1 was selling like hotcakes and there was no good launch lineup.