Samsung Electronics profits down 32% in final quarter 2022

South Korea's Samsung Electronics has reported a 32% drop in quarterly operating profit. This figure was affected by a decline in demand for electronic devices and semiconductors.

Samsung Electronics profits down 32% in final quarter 2022

Samsung's memory chip shipments were worse than analysts' already low expectations. Semiconductor prices are likely to fall further in the current quarter as customers react to higher inflation, higher interest rates on loans and Russia's actions in Ukraine.

The company believes that profits in the third quarter of 2022 fell to $7.67 billion; for the same period last year, Samsung Electronics posted profits of $11.3 billion. The current year result was 8.5% lower than SmartEstimate predicted.

The memory chip business is in a worse position than experts had expected, said Cape Investment & Securites analyst Park Sun Sun. He added that DRAM chip shipments are likely to decline from the second quarter of 2022.

Analysts forecast that memory chip prices will continue to fall in the current quarter, leading to a further drop in Samsung's profits in the fourth quarter of this year. Demand will not recover until early 2023, experts believe.

Last week, Micron Technology became the first chipmaker to cut its investment plans for next year. SK Hynix is also considering similar moves.

Samsung has not yet announced any cuts in memory chip production. The manufacturer will release a detailed earnings report on October 27 after a media and analyst briefing.

According to Counterpoint Research, Samsung shipped about 66 million smartphones in the third quarter of 2022, down 5% from a year earlier.

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