Samsung Expects Smartphone Demand to Decline YoY as Agency Experiences 69 P.c Plunge in Quarterly Revenue
Samsung on Tuesday reported its lowest quarterly revenue since 2014 and stated persistent macroeconomic uncertainty will make for a troublesome first half 12 months, although demand is prone to begin recovering within the second half.
Sluggish demand and stock adjustment will proceed to affect the chip enterprise within the first quarter, Samsung stated in a press release, including it expects “smartphone demand to say no year-on-year because of the financial slowdown in main areas”.
The world’s largest maker of reminiscence chips and smartphones reported a 69 p.c plunge in fourth-quarter revenue, as shopper demand for digital gadgets dropped whereas purchasers spent much less in a weak financial system, dragging down reminiscence chip costs.
At KRW 4.three trillion (roughly Rs. 29,000 crore), October-December working revenue was Samsung’s lowest quarterly revenue in eight years. Income fell Eight p.c to KRW 70.5 trillion gained (roughly Rs. 4.7 lakh crore).
With reminiscence chip costs falling by double-digit percentages in 2022, Samsung’s chip revenue likewise tumbled – to about KRW 270 billion (roughly Rs. 1,800 crore) within the fourth quarter from KRW 8.83 trillion (roughly Rs. 58,600 crore) in the identical interval a 12 months prior, marking the bottom since a 2011 change in accounting requirements, Samsung’s web site confirmed.
Some analysts anticipate the chip enterprise to guide a loss within the first quarter, pulling total revenue under that of the fourth.
Final week, chipmaker Intel stated it expects to lose cash within the present quarter as the private pc business experiences a chip glut.
Reminiscence chip rivals Micron Know-how and SK Hynix had already stated they might slash funding in 2023.
Traders will likely be awaiting whether or not Samsung avoids mentioning a direct chip manufacturing reduce – as is its standard stance – or relatively offers a transparent sign of manufacturing cuts given the severity of the reminiscence chip down-cycle.
In cell, Samsung stated fourth-quarter revenue fell to KRW 1.7 trillion (roughly Rs. 11,300 crore) from KRW 2.66 trillion (roughly Rs. 18,000 crore) a 12 months earlier, as a decline in low- and mid-end smartphone gross sales had been larger than anticipated on account of “continued inflation and geopolitical instability.”
Samsung plans to unveil its newest Galaxy S flagship smartphones later this week.
Shares in Samsung fell 2.1 p.c in morning commerce, versus a 0.2 p.c drop within the wider market.
© Thomson Reuters 2023
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