Samsung’s revenue within the fourth quarter final yr dropped practically 70% from a yr prior on account of low demand for semiconductors and smartphones attributable to the worldwide financial downturn.
The South Korean tech large stated in its earnings steerage on Friday that it anticipated an working revenue of 4.3 trillion gained and a income of 70 trillion gained for the fourth quarter of 2022. Income dropped roughly 9% from a yr prior whereas working revenue dipped by 69% over the identical time interval.
Additionally, working revenue dropped by greater than half from the third quarter when Samsung saw its first year-on-year profit decline in three years as demand for chips started to weaken considerably.
In an announcement in regards to the fourth quarter, Samsung stated it noticed a big drop in earnings from the reminiscence enterprise on account of lackluster demand whereas additionally seeing weaker gross sales of smartphones, amid continued exterior uncertainties together with “a possible world financial downturn”.
The corporate stated the decline in demand for reminiscence chips throughout the fourth quarter was better than anticipated as clients adjusted their inventories to tighten their funds. This additionally triggered the common gross sales costs of chips to drop greater than anticipated, Samsung added.
Extended macro points additionally triggered weak demand for smartphones, the South Korean tech large stated, whereas sluggish demand and elevated price burdens for dwelling home equipment continued.
South Korean analysts largely count on the downturn within the world reminiscence chip market, which is occurring after years of excessive progress, to proceed till at the very least the primary half of 2023 whereas remaining weak all year long in comparison with 2022.
Samsung’s chip enterprise might even see its first working loss in practically ten years someday subsequent yr, based on analysts.
The tech large will announce its full earnings report close to the top of the month.
