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

South Korean tech large blames weak demand for reminiscence chips for sharp decline in earnings.

Samsung Electronics is anticipating its worst fourth-quarter revenue in eight years amid a pointy decline in world demand for reminiscence chips and smartphones.

Income are estimated to have plunged by 69 p.c to 4.3 trillion gained ($3.4 billion) throughout the October-December interval, the South Korean tech large mentioned on Friday.

Weak demand for reminiscence chips was “larger than anticipated as clients adjusted inventories… to additional tighten funds spurred by issues over deteriorating client sentiment triggered [by] continued excessive world rates of interest and weak financial outlooks,” Samsung mentioned in an announcement.

The preliminary outcomes, which have been properly wanting estimates, level to Samsung’s smallest quarterly revenue for the reason that third quarter of 2014.

The dismal revenue estimate by the world’s largest reminiscence chip, smartphone and TV maker – a bellwether for world client demand – units a weak tone for different know-how corporations’ quarterly outcomes.

“All of Samsung’s companies had a tough time however chips and cellular particularly,” mentioned Lee Min-hee, an analyst at BNK Securities.

Rising world rates of interest and value of dwelling have dampened demand for Samsung’s smartphones in addition to the semiconductors it provides to rivals corresponding to Apple.

“Reminiscence chip costs fell within the mid-20 p.c throughout the quarter, and high-end telephones corresponding to foldable didn’t promote as properly,” mentioned Lee, including that Samsung’s show enterprise was damage on account of consumer Apple’s manufacturing delays on the world’s largest iPhone manufacturing facility in China throughout the quarter.

Three analysts mentioned they anticipated Samsung’s earnings to dive once more within the present quarter, with a probable working loss for the chips enterprise as a glut drives an additional drop in reminiscence chip costs.

Samsung had mentioned in October that it didn’t count on a lot change to its 2023 investments.

Samsung has a historical past of not saying reminiscence chip manufacturing cuts, in response to analysts, however might organically regulate funding by delaying bringing in gear or by different methods.

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