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Friday, October 20, 2023

Samsung Electronics experiences 95% revenue drop for Q2

Samsung experiences earnings

Samsung continues to get beat up by weak chip demand and a declining smartphone market, reporting a 95% revenue drop in its second quarter.

Overstocked provide has led to cost cuts within the DRAM and RAM business, plus the demand for smartphones has additionally slipped, resulting in a double whammy for Samsung. Together with the newest information, the corporate reported horrible outcomes for its December and March quarters too.

In response to a report from CNBC masking Samsung Electronics’ earnings, the corporate reportedly earned $47.21 billion in income and a 95% decline in earnings.

It appears these outcomes present poor earnings for a similar causes because the earlier quarters — a mix of a worldwide financial downturn and an excessive amount of provide. The availability situation is Samsung’s personal doing, because it tried to seize market share by rising manufacturing when opponents decreased theirs.

The result’s a market flooded with chips and never sufficient demand to purchase them up. So, costs needed to fall to get models transferring.

Samsung nonetheless sees a brilliant spot regardless of the restricted earnings. It expects the second half of 2023 will assist flip issues round.

“International demand is anticipated to step by step recuperate within the second half of the 12 months, which ought to result in an enchancment in earnings pushed by the element enterprise,” Samsung stated in its earnings report. “Nonetheless, continued macroeconomic dangers may show to be a problem in such restoration in demand.”

Samsung expects demand for DRAM and RAM to energy superior computation fashions, like chatGPT, will assist drive continued gross sales. It additionally prevented the value from dropping a lot decrease, because of the elevated demand.

The corporate will concentrate on high-value-added merchandise like DDR5, LPDDR5x, and HBM. It additionally expects to extend investments in infrastructure, R&D, and packaging expertise.

Samsung Electronics develops reminiscence and different elements for Apple’s provide chain, however it would not make Apple Silicon itself — that is TSMC. Whereas Apple’s enterprise advantages Samsung to some extent, the value drops of elements on account of Samsung’s errors have been a boon to Apple within the declining market.

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