Samsung has issued a warning that as a result of the decline in demand for electronic gadgets and the memory chips that power them, its profitability will drop by 32%.
The first profit decline recorded by Samsung Electronics Co. since 2019 highlights the severity of the worldwide PC and memory chip downturn. Operating profit decreased by 32% to 10.8 trillion won ($7.7 billion) for the three months ending in September. Expectations were 76 trillion won short on sales. The full report from Samsung, which includes details on divisional performance and net income, will be made public.
Consumers are deterred from making purchases as a result of rising prices, higher borrowing costs, and the effects of Russia’s invasion of Ukraine, which has hurt sales of electronic devices.
Due to the depletion of their current stockpiles, companies that buy memory chips, like those who manufacture cellphones and personal computers, have been forced to scale back their acquisitions.
As smartphone sales continue to plummet over the next three months, analysts in the technology sector estimate that memory chip prices will continue to decline, with no recovery in demand occurring until the beginning of next year.