Samsung Expects Q3 Revenue to Tumble Amid Chip Market Downturn


Samsung stated Thursday that it expects a steep decline in its third-quarter working revenue, its first year-over-year decline in almost three years, amid an financial downturn that is sapped client demand for PCs and telephones, in addition to the chips inside.

The Korea-based firm on Thursday predicted its working revenue for the three-month interval ended Sept. 30 would are available in at round 10.8 trillion gained ($7.6 billion), a drop of greater than 31% in contrast with the identical time interval final 12 months. It additionally stated it expects a slight improve in income, of two.7%, to 76 trillion gained ($53.9 billion).

Samsung is maybe finest recognized for its telephones and TVs, however the electronics large additionally dominates the marketplace for reminiscence chips — a key money driver for the corporate. Samsung’s chip enterprise obtained a lift from knowledge facilities that depend on the know-how to retailer every part we’re doing on-line throughout the pandemic, however client spending within the second half of this 12 months has been harm by the results of excessive inflation, rising rates of interest and geopolitical stress.

In August, IC Insights diminished its forecast for worldwide built-in circuit market progress for 2022 from 11% to 7% — a downgrade virtually totally as a result of collapse of the reminiscence market within the second half of 2022.

“It was as if somebody ‘flipped a change’ to the off place for the reminiscence market starting in June,” the corporate wrote in a report final month.

The forecast marks Samsung’s first revenue decline 12 months over 12 months for the reason that first quarter of 2020, when the pandemic spurred demand for units whereas customers have been pressured to remain dwelling. The steep decline in chip demand led Samsung executives to subject a pessimistic outlook for the marketplace for the rest of this 12 months in addition to into 2023.

“The second half of this 12 months appears unhealthy, and as of now, subsequent 12 months would not actually appear to indicate a transparent momentum for a lot enchancment,” Kyung Kye-hyun, who heads Samsung’s semiconductors unit and serves as the corporate’s co-CEO, stated at a media briefing in September, based on The Wall Avenue Journal.

Costs for NAND Flash reminiscence, broadly utilized in moveable client units like digital cameras, cell telephones and USB flash drives, have been anticipated to say no 13% to 18% within the third quarter in contrast with the earlier quarter, based on market researcher TrendForce. Costs for DRAM chips, utilized in smartphones and PCs, are anticipated to endure the same decline.

Financial uncertainty can be anticipated to harm income within the firm’s cell division. The Samsung Galaxy Fold 4 was launched throughout the quarter, but it surely was accessible for buy a bit greater than a month throughout the interval.

The earnings steering, launched forward of full earnings later this month, did not present particular divisional outcomes.

Supply hyperlink