Samsung Announces Q1 Performance Expectations: Operating profit plummets 95.8% year-on-year, revenue declines 19% year-on-year

2023-04-07 14:19 0

(PRZWT)-On April 7th, according to foreign media reports, Samsung Electronics announced its performance forecast for the first quarter of 2023 today.

The company expects its revenue to be 63 trillion won in the first quarter of 2023, a year-on-year decrease of 19% and a month on month decrease of 10.6%. The reason for the decline in revenue is due to weak demand for memory chips amidst the global economic slowdown and declining chip prices.

The company also expects an operating profit of approximately 0.6 trillion won in the first quarter, which is the first time in 14 years (since the first quarter of 2009) that the company has reported quarterly operating profit below 1 trillion won, a sharp decrease of 86.1% month on month and 95.8% year on year, due to deteriorating chip oversupply and buyers slowing down procurement in the global economic slowdown.

At the same time, Samsung stated that it will adjust chip production to a "meaningful level", reversing its stance of not artificially reducing production.

Previously, in October 2022, Samsung stated that it was not considering intentionally reducing chip production, which is contrary to the trend of the entire industry cutting production to meet medium to long-term demand. Due to declining demand and oversupply of chips, Samsung's competitors have reduced investment.

The chip division remains one of Samsung's most profitable businesses. As storage chip prices decline by a double-digit percentage in 2022, Samsung's chip division's profits have also experienced a similar decline.

At the end of January this year, the company stated that in the fourth quarter of 2022, due to customers continuing to handle large amounts of inventory, the department's profits plummeted by over 90% to 270 billion won.

In the quarter, the company's operating profit also plummeted 69% year-on-year to 4.31 trillion won, the lowest quarterly profit the company has achieved in 8 years. Despite a significant decline in profits for the quarter, the company reiterated at the time that it would not reduce chip production.

Source: Corporate press release
Keywords: Samsung
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