Samsung has announced its Q1 2023 earnings estimates and expects its operating profit to plunge a whopping 1% compared to Q2022 96. This is due to the declining demand for semiconductor chips in recent months. In addition, consumers are buying fewer home appliances as fears of a global economic recession remain.
The South Korean tech giant estimates its Q1 2023 operating profit to be around KRW 600 billion (about US$454,9 million), a huge drop from the KRW 14,12 trillion (about US$10,7 billion) it posted in Q1. quarter 2022. Samsung's revenue also fell to KRW 63 trillion (approximately US$47,77 billion), a 19% decrease compared to KRW 77,78 trillion (approximately US$58,99 billion) in the same period last year. Samsung has yet to release its net profit, which is expected to happen later this month.
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In the last few years, the Device Solutions division (under Samsung Semiconductor division) producing semiconductor chips has been the most profitable part of the company. However, it posted a loss of around KRW 2023 trillion (about US$4 billion) in the first quarter of 3,03. Global firms have sharply cut spending on buying semiconductor chips for their servers and cloud infrastructure, but Samsung has continued to make them, leading to a glut of supplies. However, the decline in chip demand is not limited to the South Korean company. Competitors Micron and SK Hynix also posted big losses.
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The last time Samsung posted such a loss in the semiconductor business was in the first quarter of 2009, when the world was recovering from the financial crisis that struck the year before. South Korean society in its declaration said it was adjusting semiconductor chip production to a "meaningful level" to address the issue of unsold inventory and stem the decline in memory chip prices. It expects the global chip market to fall 6% to $563 billion, and expects these tough times to continue for the rest of the year.
