By Joyce Lee and Heekyong Yang
SEOUL – Samsung Electronics Co Ltd on Tuesday reported its lowest quarterly revenue since 2014 and mentioned persistent macroeconomic uncertainty will make for a troublesome first half 12 months, although demand is more likely to begin recovering within the second half.
Sluggish demand and stock adjustment will proceed to affect the chip enterprise within the first quarter, Samsung mentioned 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% plunge in fourth-quarter revenue, as client demand for digital gadgets dropped whereas purchasers spent much less in a weak financial system, dragging down reminiscence chip costs.
At 4.3 trillion received ($3.49 billion), October-December working revenue was Samsung’s lowest quarterly revenue in eight years. Income fell 8% to 70.5 trillion received.
With reminiscence chip costs falling by double-digit percentages in 2022, Samsung’s chip revenue likewise tumbled – to about 270 billion received within the fourth quarter from 8.83 trillion received 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 count on the chip enterprise to e-book a loss within the first quarter, pulling total revenue under that of the fourth.
Final week, chipmaker Intel Corp mentioned it expects to lose cash within the present quarter as the non-public laptop trade experiences a chip glut.
Reminiscence chip rivals Micron Expertise Inc and SK Hynix Inc had already mentioned they might slash funding in 2023.
Traders will probably be looking forward to whether or not Samsung avoids mentioning a direct chip manufacturing lower – as is its normal stance – or reasonably offers a transparent sign of manufacturing cuts given the severity of the reminiscence chip down-cycle.
In cellular, Samsung mentioned fourth-quarter revenue fell to 1.7 trillion received from 2.66 trillion received a 12 months earlier, as a decline in low- and mid-end smartphone gross sales was higher than anticipated as a consequence 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% in morning commerce, versus a 0.2% drop in wider market.
($1 = 1,232.6000 received)
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