![Loading...](https://assets.techcircle.in/static-assets/images/spinner-1s-64px.gif)
Samsung to report lowest quarterly profit in 14 years over dwindling chip demand
![Samsung to report lowest quarterly profit in 14 years over dwindling chip demand](https://assets.techcircle.in/uploads/article-image/2023/04/images/32452-samsung-rf-187758354-xl-1.jpg)
![Loading...](https://assets.techcircle.in/static-assets/images/spinner-1s-64px.gif)
Samsung Electronics is estimated to post its largest quarterly net loss in 14 years, driven by dwindling chip demand across enterprise and consumer markets globally. According to an estimate of the company’s Q4FY23 earnings slated to be reported later this month, quarterly net profit is tipped to drop 92% sequentially. Reported by market analysis firm Refinitiv, Samsung is tipped to report operating profit of $824.4 million for the quarter ended March 31 — the lowest its quarterly operating profit has been since the March quarter of 2009.
The company’s reported operating profit in the March quarter of last year was $10.78 billion. Net loss for the period is estimated to reach $2.3 billion.
The drop in Samsung’s quarterly earnings is expected amid a phase of global slowdown in the overall technology markets. Samsung’s slowdown, to be sure, comes amid a global slowdown in the demand for DRAM memory chips — a crucial component of consumer devices such as smartphones and televisions, as well as in enterprise products such as data centre chips.
![Loading...](https://assets.techcircle.in/static-assets/images/spinner-1s-64px.gif)
On Tuesday, Reuters reported, citing TrendForce data, that prices of DRAM memory chips in the supply chain have dropped by 20% annually, owing to a global demand slowdown. Samsung is the largest supplier of DRAM memory chips globally — according to data from market researcher Statista from the December 2022 quarter, Samsung supplied 40.7% of the world’s DRAM memory chips. Korean firm SK Hynix and US’ Micron Technologies rank among the top three.
To be sure, the slowdown was predicted by industry stakeholders in the global chip supply chain. In October last year, Mint reported that both Taiwan Semiconductor (TSMC) and Hon Hai Precision Co, known better as Foxconn, projected “likely declines” and slowdowns in chip supply around the world — despite posting record quarterly net profit and revenue in the September quarter.
While TSMC recorded an 80% sequential rise in net profit to $8.8 billion, Foxconn reported record quarterly revenue of $25.9 billion for the period.
![Loading...](https://assets.techcircle.in/static-assets/images/spinner-1s-64px.gif)
However, industry analysts warned of a slowdown in tech spending amid a phase of lull in consumer demand, as well as global macroeconomic uncertainties. Amid a drop in prices of memory chips, brands globally have also cut orders and shifted to utilising inventories to manage operating margins, The Wall Street Journal reported in October last year.