Samsung’s networks revenue fell sharply year on year in Q1 2026In the midst of a tough telecom market, Samsung is pivoting to focus on AI and data center customersIt’s getting into the silicon photonics and co-packaged optics game<\/p>\n
Samsung\u2019s networks business took a beating in Q1 2026<\/a>. Revenue of $407.5 million (600 billion KRW) was down substantially from roughly $543 million (800 billion KRW) in Q1 2025 and around $734 million (1.08 trillion KRW) in Q1 2023. But as its mobile networks business flails in the lull between 5G and 6G, the company is setting its sights on underpinning a different kind of network.\u00a0<\/p>\n For the record, Samsung isn\u2019t alone in facing a tough telecom market. Ericsson\u2019s mobile network sales declined 8% in Q1,<\/a> while Nokia\u2019s fell 3%.<\/a> Ericsson\u2019s overall revenue also dropped 10%, but Nokia eeked out 2% growth thanks in large part to a big boost from its Optical Networks division and a jump in sales to AI and cloud customers.\u00a0<\/p>\n Samsung, though late to the party, seems to have gotten the memo that optical is the way to go as AI drives demand among hyperscale customers.\u00a0<\/p>\n In March, the company announced plans for its Foundry division to get into the silicon photonics and co-packaged optics game. During Q1 earnings, Foundry EVP Suk Chae Kang said it will be \u201cstarting mass production for a major optical communications module player starting in the second half of this year.\u201d<\/p>\n \u201cWe are actively pursuing structural transformation by diversifying our application portfolio beyond mobile into AI HPC, automotive, and aerospace sectors,\u201d Kang said. \u201cFor data centers, we are seeing growing demand for high-bandwidth and low-power data transmission, which has led to a rapid rise in demand for silicon photonics. We are developing not only silicon photonics components, but also technology for the CPO or co-packaged optics business.\u201d<\/p>\n Samsung\u2019s approach to the optical market differs from Nokia\u2019s in that it will apparently manufacture photonics and CPO for others rather than selling its own optical products. But the goal is the same: capitalize on AI-driven demand from hyperscalers and big tech companies.\u00a0<\/p>\n \u201cTelecom sales is tough,\u201d AvidThink Founder and Principal Roy Chua told Fierce. \u201cGoing into silicon photonics makes sense because optical is a growth market and that should help them.\u201d<\/p>\n