Samsung announced that it had a bad time, announcing a 95% ($478 million) drop in operating profit in the first three months of 2023. On the other hand, profits in the smartphone division increased.
South Korea-based technology giant Samsung announced its earnings in the first quarter of 2023. The company had a terrible time for memory chips amid falling demand and excess inventory. So much so that in memory chips, which is normally the area where it makes the highest profit. 3.4 billion There was a dollar loss.
In addition, the company’s operating profit in the first three months of the year is approximately $478 million reported falling. This is compared to the previous year to a 95% drop corresponds.
Worldwide economic problems, biggest cause of decline
In fact, Samsung signaled this decline in its preliminary earnings call earlier this month. The technology giant, which was below the estimates, announced that it would reduce the production of memory chips after the decline.
Several different factors lie behind Samsung’s losses. Smartphone and PC manufacturers are struggling with rising demand during the pandemic. they stocked up chips. However, the economic problems experienced all over the world have resulted in a wide range of electronic products. stagnation of demand This caused memory prices to drop. The company’s move to reduce production was also described as an important step in ending the supply glut.
On the other hand, Samsung in the second half of the year, the chip segment begins to recover. He said he hoped. At this time of year, current stocks are expected to run out and smartphone and PC launches are expected to drive demand. Apart from these, it should be added that the company’s chip production reduction plan is short-term and solid demand is foreseen in the medium and long term.
Profit increased in the smartphone division
The company didn’t get all bad news last quarter. The smartphone division has had a good period in terms of profits in the past months, when the Galaxy S23 series was introduced, although revenues fell. The profit here is compared to the previous year. up 3% to approximately $2.9 billion rose. Already, a report published in the past weeks revealed that Samsung surpassed Apple as the most preferred smartphone brand in the first quarter.
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