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Samsung projects lowest profits in 8 years owing to weak smartphone demand
- Samsung is projecting its lowest quarterly profit in eight years.
- The slump comes from a weakened demand for chips and smartphones.
- Samsung blames the current global economic situation, high cost of living, and rising interest rates for the situation.
Earlier today, Samsung reported that its fourth-quarter profit would slump to an eight-year low owing to weak chip and smartphone demand amidst the bruised global economic situation.
Compared to the same quarter last year, Samsung’s profits fell a whopping 70%. The company estimates that its October- December 2022 profit stands at 4.3 trillion won ($3.4 billion), down from 13.87 trillion won a year ago. The last time Samsung posted such dismal numbers was in the third quarter of 2014.
“With external business environments set to remain uncertain, chip sales plummeted due to lower demand from server clients, data centers, and handset makers,” Samsung Electronics said in a statement.
Consumers are spending less on electronics, including smartphones and smart home appliances, owing to sky-rocketing interest rates and soaring inflation, Samsung said. The company’s sales dipped 8.6% compared to last year due to the demand slump resulting from “extended macro issues.”
“All of Samsung’s businesses had a hard time, but chips and mobile especially,” Lee Min-hee, an analyst at BNK Investment & Securities, told Reuters.
This bleak forecast by the world’s largest chip, smartphone, and TV maker can be seen as a sign of things to come in the tech industry. Analysts predict other tech firms might poststing weak quarterly results in the coming days.