Chips and smartphones down, Samsung profits plummet


Samsung’s profit in the fourth quarter of last year fell nearly 70% from a year earlier due to weak demand for semiconductors and smartphones due to the global economic slowdown.

The South Korean tech giant’s revenue fell around 9% from a year earlier, but operating profit plunged 69% in the same period.

Operating profit also fell by more than half from the third quarter, when Samsung suffered its first year-on-year profit decline in three years, as demand for chips began to weaken significantly.

In a fourth quarter statement, Samsung said it experienced a significant decline in memory business earnings due to weak smartphone demand and sales amid continued external uncertainties, including “a slowdown in potential global economy.

A slowdown that will continue into 2023

The decline in demand for memory chips during the fourth quarter was larger than expected, Samsung said, as customers adjusted inventory to tighten finances. Which also led to a bigger-than-expected decline in average chip selling prices, the company adds. And, after the shortage of the past two years, now chip stocks are exploding, leading semiconductor companies to revise their production forecasts.

Prolonged macroeconomic problems also led to weak demand for smartphones, the South Korean tech giant said, while sluggish demand and rising costs for home appliances continued.

South Korean analysts largely expect the slowdown in the global memory chip market, which comes after years of strong growth, to continue at least until the first half of 2023, while remaining weak throughout. throughout the year compared to 2022.

Analysts say Samsung’s chip business could suffer its first operating loss in nearly 10 years sometime next year. The tech giant will announce its full results towards the end of the month.

Source: ZDNet.com





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