Samsung Expects Q3 Profit to Tumble Amid Chip Market Downturn

Samsung said Thursday that it expects a steep decline in its third-quarter operating profit, its first year-over-year decline in nearly three years, amid an economic downturn that’s sapped consumer demand for PCs and phones, as well as the chips within.

The Korea-based company on Thursday predicted its operating profit for the three-month period ended Sept.

30 would come in at around 10.8 trillion won (£7.6 billion), a drop of more than 31% compared with the same time period last year. It also said it expects a slight increase in revenue, of 2.7%, to 76 trillion won (£53.9 billion). Samsung is perhaps best known for its phones and TVs, but the electronics giant also dominates the market for memory chips — a key cash driver for the company.

Samsung’s chip business got a boost from data centers that rely on the technology to store everything we’re doing online during the pandemic, but consumer spending in the second half of this year has been hurt by the effects of high inflation, rising interest rates and geopolitical tension. In August, IC Insights reduced its forecast for worldwide integrated circuit market growth for 2022 from 11% to 7% — a downgrade almost entirely due to the collapse of the memory market in the second half of 2022. “It was as though someone ‘flipped a switch’ to the off position for the memory market beginning in June,” the company wrote in a report last month.

The forecast marks Samsung’s first profit decline year over year since the first quarter of 2020, when the pandemic spurred demand for devices while consumers were forced to stay home. The steep decline in chip demand led Samsung executives to issue a pessimistic outlook for the market for the remainder of this year as well as into 2023. “The second half of this year looks bad, and as of now, next year doesn’t really seem to show a clear momentum for much improvement,” Kyung Kye-hyun, who heads Samsung’s semiconductors unit and serves as the company’s co-CEO, said at a media briefing in September, according to The Wall Street Journal.

Prices for NAND Flash memory, widely used in portable consumer devices like digital cameras, cell phones and USB flash drives, were expected to decline 13% to 18% in the third quarter compared with the previous quarter, according to market researcher TrendForce. Prices for DRAM chips, used in smartphones and PCs, are expected to suffer a similar decline. Economic uncertainty is also expected to hurt profits in the company’s mobile division.

The Samsung Galaxy Fold 4 was released during the quarter, but it was available for purchase a little more than a month during the period.

The earnings guidance, released ahead of full earnings later this month, didn’t provide specific divisional results.

Tags:

banner-buzz listed on couponmatrix.ukbedfolk listed on couponmatrix.ukedinburgh-airport-parking listed on couponmatrix.ukmasdings listed on couponmatrix.ukmattressman listed on couponmatrix.ukthinktank listed on couponmatrix.uk
banner-buzz listed on couponmatrix.ukBannerBuzz is a leading provider of custom banners, signs and other marketing materials. They offer a wide range of products and services to help businesses promote their brand and reach their target audience. Ranging from table covers to custom flags and posters, you can find everything you need to make your business flourish at BannerBuzz. You can also use a trusty BannerBuzz discount code to save on your next purchase!
bedfolk listed on couponmatrix.ukWrap up warm in sheets fit for royalty from Bedfolk. Accepting nothing but the finest linen and cotton blends for their bedsheets, pillows and duvet covers, Bedfolk surpass expectations to offer quality sleep to snoozing customers worldwide. Utilise our latest Bedfolk discount code to secure yourself many a night of unrivalled sleep for less. Like, Bedfolk and their luxurious bedding make for the ideal birthday, Christmas or wedding present for anyone eager to sleep soundly.
edinburgh-airport-parking listed on couponmatrix.ukWhen you’re about to fly off to some far-flung destination for a well-deserved break, the last thing you want to be worrying about is your car. With one of our handy Airport Parking discount codes, you can leave your car safe and sound at the Edinburgh terminal for a steal. Whether you plan to be gone for a while or you’re just off for a short break, you can rest assured your vehicle will be well looked after.
masdings listed on couponmatrix.ukLove designer clothing but loathe the premium price tag? Turn to Masdings to get your affordable high end fashion fix! Bag yourself a Masdings discount code from us to browse world class brands like Love Moschino, Calvin Klein, and Vivienne Westwood without breaking the bank. With quality selections for men, women and children alike, you can kit out the whole family for any occasion in apparel that’s built to last. From beautiful knits to designer denim, Masdings will have you dressed to impress from head-to-toe with its eclectic collection and unbeatable prices.
mattressman listed on couponmatrix.ukTreat yourself to a high quality sleep for a low cost price, and buy your mattress, bed frame and bedding from Mattressman. With over 8000 beds and accessories in stock, Mattressman is Britain’s biggest mattress specialist and your one-stop shop for a bedroom conducive to rest. Just grab a Mattressman discount code from us to cut the cost of your shop, and dive straight into the extensive collection - there’s a bed to suit every budget and taste!
thinktank listed on couponmatrix.ukProve to the whole family that science is tons of fun, and enjoy a fascinating day out at the award-winning museum Thinktank. Help yourself to our Think tank vouchers to access four floors of hands-on exhibits and thought-provoking collections for a fraction of the regular price. Whether you want to admire a life-size Spitfire model or get up close and personal with a 250,000 specimen strong natural science collection, you’ll make all manner of discoveries worth writing home about when you spend the day at Thinktank.