Samsung Electronics is having another bad quarter according to the company itself preliminary estimates. This time, he notes, quarterly operating profit was down 96 percent compared to the same period last year, worse than the two-thirds drop it suffered the previous three months. Even strong sales of the new Galaxy S23 series couldn’t outweigh the global drop in demand for chips.
Demand for semiconductors has fallen since the covid peak as everyone splurged on lockdown toys and tools. Now, the global economic slowdown has made consumers think twice about buying the next device, causing chip inventories to surge for companies like Samsung. And according to my ECON101 professor, prices will fall when there is more supply than demand, which will hurt corporate profits. And you can’t get a pardon for that.
But don’t feel bad for Samsung. He still made a lot of money. Operating profit is estimated at 600 billion won (about $456 million), the lowest in 14 years. reports the financial times. It’s just not the staggering 14.12 trillion Korean won (about $10.7 billion) raised last year right now.
As a result, Samsung says it is cutting memory chip production to a “significant level” to address oversupply. “We have cut production plans in the near term, but as we project robust demand in the medium to long term, we will continue to invest in infrastructure to secure essential cleanrooms and expand R&D investment to consolidate technology leadership,” he said. Samsung in a statement.
A bright spot of the quarter was the new Galaxy S23 series, with sales of around 11 million units. That represents a 50 percent increase compared to its predecessor, according to Hanwha Investment & Securities analyst Kim Kwangjin, as reported by Bloomberg.
Samsung will issue its final financial statement in a few weeks, but it typically differs little, if at all, from preliminary guidance.
