Samsung Electronics, the semiconductor subsidiary of Samsung, has announcement what its advantages fell 69% during the fourth quarter of 2022. An alarming figure, which shows the extent of the slowdown in the tech field, after the pandemic episodes.
The onset of a semiconductor crisis?
On Friday, January 6, 2023, the South Korean tech giant told the press that its operating income will not exceed $3.4 billion. One shock to chip industry watchers, which was expecting much better, despite the global economic slowdown. Sales for this fourth quarter of 2022 for Samsung are also down 8.6% compared to the previous year. It reaches 70,000 billion won, or 55 billion dollars.
Results well below market forecasts. Analysts interviewed by Fact set it expected Samsung to report operating income of at least $5.6 billion. The company is considered a ” indicator ” greater in the technology sector. It is one of the world’s largest semiconductor suppliers and the number one seller of smartphones and televisions, as well as a major player in many other areas of consumer electronics.
The company explained that its profits fell due to a sharp drop in demand. A few days ago, Samsung CEO Han Jong-hee said he expects the tech crisis to continue. The possibility of a global recession and macroeconomic uncertainties weigh on its core businesses. The technology sector has been hit hard by the crisis.
Consumers and businesses have drastically reduced their spending on tech gadgets and electronics due to rising inflation and rising interest rates. In 2022, smartphone sales decreased by 9% and those of laptops by 12%, compared to the previous year. Not surprisingly, semiconductor sales, which fluctuate with the demand for technology products, have also declined.
Over the past year, global chip sales have declined by 4.1 percent according to the Statistics on world trade in semiconductors. In the fourth quarter, prices for Samsung’s DRAM and NAND flash decreased by almost 30%. The memory chip industry is plagued by a severe supply-demand imbalance. A situation that has not occurred for 13 years. Analysts believe profitability will remain fragile in 2023.
