Samsung’s quarterly profit hits 8-year low amid weak demand for memory chips, smartphones
Samsung Electronics’ operating profit plummeted 69% to $3.4 billion in the quarter that ended in December to an eight-year low, according to its preliminary estimates, as the global demand for memory chips and smartphones wanes due to high inflation and a slowing economy.
“Amid continued external uncertainties, including a potential global economic downturn, overall earnings decreased sharply quarter on quarter as we saw a significant drop in the memory business results due to lackluster demand and weaker sales of smartphones,” the company said in a statement.
The memory chipmaker and smartphone producer saw sales of 70 trillion won ($55 billion) in the quarter, down roughly 8.6% over the same period a year ago.
The sharp drop in demand for memory chips, including DRAM and NAND, which are used in gadgets and data centers, has also pushed manufacturers and vendors to lower their price, according to TrendForce.
“For the memory business, the decline in the fourth quarter demand was greater than expected as customers adjusted inventories in their effort to further tighten finances by concerns over deteriorating consumer sentiment,” the company said. “Profits from the mobile experience business declined as smartphones sales and revenue decreased due to weak demand resulting from prolonged macro issues.”
Many chip firms, including Micron and SK Hynix, plan to slash their capital expenditure and reduce inventories this year. Samsung has previously said it doesn’t plan to reduce its capex. Read More…
