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Samsung's quarterly profit could fall to a six-year low.

Published: 2023-01-05

According to analysts, the operating profit of Korean Samsung Electronics for the past quarter should decline in annual comparison by 50-58% to a six-year low corresponding to the range from $4.62 to $5.64 billion in equivalent value. The situation on the memory market will not contribute to the rapid recovery of positive dynamics.

Analysts are prompted to such forecasts by the negative dynamics of prices for memory chips, the largest manufacturer of which is a South Korean company. According to some estimates, the dynamics of memory price decline in the current environment is close in its drama to the events of 2008, when the global financial market was in the grip of a global crisis. Everything is exacerbated by an unfavorable combination of lower demand and overstocking of warehouses, which has not been observed in the previous ten years.

According to experts, the release of flash memory brought Samsung only losses in the fourth quarter, and the production of DRAM, if it provides profit in the first half of this year, is very modest. Memory is responsible for about half of Samsung's operating income. For this reason, the overall financial performance of the manufacturer is very sensitive to the state of affairs in the memory market. Samsung will sum up the preliminary results of the last quarter this Friday, and the full report will be published before the end of this month.

Analysts expect that Samsung will be able to overcome the bottom of the crisis in the memory market in the second quarter of this year, and in the second half of the year it will be possible to count on the positive dynamics of certain indicators. Last year, RAM prices dropped 40% and solid-state memory prices dropped 14%, according to TrendForce. Operating income for Samsung's semiconductor business as a whole is expected to fall by 78% in the last quarter, and mobile devices will bring the company 14% less profit than a year earlier.