Samsungs Having A Terrible Financial Year
© - Photo by JUNG YEON-JE/AFP via Getty Images Samsung's chip business wipes out profits.Samsung Electronics is expecting another bad quarter, according to the company's initial estimates. This time, there was a warning that quarterly operating profit was down 96% year-over-year, worse than the two-thirds drop over the last three months. Even the strong sales of the new Galaxy S23 series can't keep up with the declining demand for chips globally.
Demand for semiconductors has fallen since its peak as everyone brags about connected toys and gadgets. Now, the global economic downturn has made consumers think twice about buying their next device, which has increased chip stocks at companies like Samsung. And according to my professor at ECON101, when supply outweighs demand, prices will fall, hurting a company's profits. And you will not be forgiven for that.
But don't worry about Samsung. He still makes a lot of money. Operating profit is expected to be 600 billion won (about $456 million), the lowest in 14 years, according to the Financial Times . That's not just last year's 14.12 trillion won (about $10.7 billion) at this point.
As a result, Samsung said it was reducing its memory chip production to a "significant level" to deal with the oversupply. "We have reduced production plans in the short term, but as we anticipate strong demand in the medium to long term, we will continue to invest in infrastructure to provide essential cleanrooms and increase R&D investment to strengthen technical leadership," Samsung said. on the phone. he told a press conference. licence.
One of the highlights of the quarter was the new Galaxy S23 series, which sold nearly 11 million units. That's 50% more than its predecessor, according to Bloomberg , Hanwha Investment & Securities analyst Kim Kwangjin.
Samsung will release its final financial report in a few weeks, but it usually doesn't differ much from the original estimate.
