Samsung says it expects lowest quarterly profit in 8 years

South Korean tech large blames weak demand for reminiscence chips for sharp decline in income.

Analysts say they anticipate Samsung's income to dive once more within the present quarter [Jo Yong-Hak/Reuters]

Samsung Electronics is anticipating its worst fourth-quarter revenue in eight years amid a pointy decline in world demand for reminiscence chips and smartphones.

Income are estimated to have plunged by 69 % to 4.3 trillion received ($3.4 billion) throughout the October-December interval, the South Korean tech large mentioned on Friday.

Weak demand for reminiscence chips was “better than anticipated as clients adjusted inventories… to additional tighten funds spurred by considerations over deteriorating client sentiment brought about [by] continued excessive world rates of interest and weak financial outlooks,” Samsung mentioned in a press release.

The preliminary outcomes, which have been nicely wanting estimates, level to Samsung’s smallest quarterly revenue because the third quarter of 2014.

The dismal revenue estimate by the world’s largest reminiscence chip, smartphone and TV maker – a bellwether for world client demand – units a weak tone for different expertise companies’ quarterly outcomes.

“All of Samsung’s companies had a tough time however chips and cellular particularly,” mentioned Lee Min-hee, an analyst at BNK Securities.

Rising world rates of interest and value of dwelling have dampened demand for Samsung’s smartphones in addition to the semiconductors it provides to rivals reminiscent of Apple.

“Reminiscence chip costs fell within the mid-20 % throughout the quarter, and high-end telephones reminiscent of foldable didn’t promote as nicely,” mentioned Lee, including that Samsung’s show enterprise was damage because of shopper Apple’s manufacturing delays on the world’s greatest iPhone manufacturing unit in China throughout the quarter.

Three analysts mentioned they anticipated Samsung’s income to dive once more within the present quarter, with a probable working loss for the chips enterprise as a glut drives an extra drop in reminiscence chip costs.

Samsung had mentioned in October that it didn't anticipate a lot change to its 2023 investments.

Samsung has a historical past of not asserting reminiscence chip manufacturing cuts, based on analysts, however may organically modify funding by delaying bringing in gear or by means of different methods.