Samsung Electronics is expected to see quarterly profit plummet by 58% to its lowest level in six years, as a worldwide economic crisis saps demand for electronic products and clouds the future for the memory chip industry.
As a result of consumers and businesses cutting spending and investment in response to high inflation and rising interest rates, smartphone manufacturers and other clients withheld orders for memory chips, while handsets sold for less due to a decline in demand, according to analysts.
As the world’s largest manufacturer of memory chips, smartphones, and televisions, Samsung is an indicator of worldwide consumer trends. The company is anticipated to release preliminary findings on Friday and complete results later this month.
According to 21 analysts polled by Refinitiv SmartEstimate, the operating profit of the fourth-most valuable publicly traded firm in Asia fell to 5.9 trillion won ($4.62 billion) in the fourth quarter.
This would be the lowest quarterly profit for Samsung since the third quarter of 2016 and compares to an operating profit of 13,87 trillion won a year earlier.
According to TrendForce statistics, the prices of some DRAM memory chips, which are extensively used in smartphones and personal computers, plummeted 40% over the past year, while the prices of NAND flash chips, which are used for data storage, fell 14%.