Samsung has a bleak outlook for the first quarter of 2023, with operating profit down 96% year-over-year. This decline was fueled by a slowdown in demand for semiconductor chips and global economic uncertainty, as well as lower sales of home appliances.

The South Korean tech giant estimates that its operating profit will reach about 600 billion won ($454.9 million) in the first quarter of 2023, down from the 14.12 trillion won ($10.7 billion) achieved in the same period in 2022. The values ​​correspond to approximately 2.2 billion reais and 54.1 billion reais, respectively, at the current exchange rate.

In addition, the company’s revenue also decreased by 19% compared to last year, falling to 63 trillion South Korean won (47.77 billion US dollars). Final earnings and earnings figures for Samsung have yet to be released by the company, but are expected to be presented in the company’s next financial report.

Samsung’s semiconductor chip business, overseen by its Device Solutions division, has been one of the company’s most profitable in recent years. However, in the first quarter of 2023, the division suffered significant losses totaling around 4 trillion won (about US$3.03 billion).

Data released by the South Korean company shows that Samsung’s semiconductor division posted a loss for the first time in 14 years. This drop was mainly driven by lower demand for semiconductor chips such as SSDs and DRAM.

The lack of demand for chips affects not only Samsung

Companies around the world are facing a drop in demand for semiconductor chips, which has forced them to reduce the cost of buying chips for their servers and cloud infrastructure. Samsung decided to continue manufacturing chips, but this led to a glut in inventory.

While the problem is serious enough for Samsung, it’s not just the South Korean tech giant’s problem. This is because the company’s other competitors in chip manufacturing also faced the same scenarios, and Micron and SK hynix also faced significant revenue cuts.

Samsung is facing its first significant losses in its semiconductor business since the 2008 global financial crisis. The company announced that it is adjusting its chip production to a “significant level” to address excess inventory and prevent chip prices from falling. Samsung expects the global chip market to fall 6% to $563 billion and expects the problems to continue throughout the year.

Samsung Launches Power Surge Resistant Evolution Refrigerator with 20-Year Warranty
The new Samsung refrigerator is available from 4900 reais on the official website of the manufacturer.

Via: Sammobil

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