Samsung Electronics is projected to experience a drastic 96 percent decline in profit for the June quarter compared to the previous year, marking the lowest quarterly profit in over 14 years. This decline is primarily driven by the chip glut, which has resulted in significant losses for Samsung’s cash cow business despite a decrease in supply. Refinitiv SmartEstimate predicts that the company’s operating profit for the quarter will be around 555 billion won ($427 million), a substantial drop from the 14.1 trillion won recorded in the same quarter last year.
The chip division, traditionally a strong revenue source for Samsung, is expected to report losses of around 3 trillion to 4 trillion won due to a further decline in memory chip prices and a reduction in inventory values. Demand for DRAM memory chips, widely used in smartphones, PCs, and servers, has decreased, leading to a 13 to 18 percent slide in prices. However, the rate of decline has slowed as Samsung and other memory chip manufacturers have cut supply. Analysts predict that the market will reach its lowest point in the third quarter and a substantial recovery may not occur until 2024.
Despite the current downturn, Samsung is actively exploring opportunities to increase its market share in the artificial intelligence (AI) sector, particularly in high bandwidth memory (HBM) and chip contract manufacturing.
In terms of its mobile business, Samsung is expected to report an operating profit of around 3.3 trillion won. Efforts to reduce marketing costs have offset a slight drop in smartphone shipments compared to the previous quarter when the company launched its latest flagship model.
In a bid to dominate the premium phone market before the release of Apple’s next iPhone, Samsung plans to unveil its latest foldable smartphones ahead of schedule in Seoul later this month.
These preliminary earnings results will be announced this Friday, with full earnings disclosure to follow later this month.
($1 = 1,298.7800 won)
READ:
Samsung Electronics to expand chip production at largest plant next year – media
Samsung flags H2 recovery after record $3.4-B chip loss in Q1
Your subscription could not be saved. Please try again.
Denial of responsibility! SamacharCentrl is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
Denial of responsibility! Samachar Central is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
