Samsung says it expects lowest quarterly profit in 8 years | Technology

The South Korean tech giant blamed weak memory chip demand for the sharp drop in profits.

Samsung Electronics is forecasting its worst fourth-quarter profit in eight years amid plummeting global demand for memory chips and smartphones.

Profit is estimated to have fallen 69 percent to 4.3 trillion won ($3.4 billion) between October and December, the South Korean tech giant said on Friday.

Weak demand for memory chips was “larger than expected as customers adjusted their inventories… to further tighten finances fueled by concerns about worsening consumer sentiment.” [by] “Global interest rates continue to be high and the economic outlook is weak,” Samsung said in a statement.

Preliminary results, which fall short of estimates, point to Samsung’s smallest quarterly profit since Q3 2014.

The dismal profit estimates for the world’s largest maker of memory chips, smartphones and TVs – an indicator of global consumer demand – provide a weak signal for the quarterly results of the companies. other technology companies.

Lee Min-hee, an analyst at BNK Securities, said: “All of Samsung’s businesses are struggling, except for chips and especially mobile phones.

Global interest rates and rising costs of living have dampened demand for Samsung’s smartphones and the semiconductors it supplies to rivals like Apple.

“Memory chip prices fell about 20% during the quarter, and high-end phones like foldables didn’t sell either,” Lee said, adding that Samsung’s display business was affected. due to production delays by Apple customers. largest iPhone factory in China during the quarter.

Three analysts said they expect Samsung’s profits to fall again in the current quarter, with the chip business likely to lose money as oversupply drives down memory chip prices further.

Samsung said in October that it doesn’t expect much change to its 2023 investments.

According to analysts, Samsung has a history of not announcing cuts in memory chip production, but can organically adjust its investment by delaying the introduction of devices or through other means.

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