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Samsung Electronics logs worst quarterly earnings in 14 years 

SAMSUNG Electronics on Thursday reported its worst quarterly profits in 14 years, blaming slowing consumer spending on electronics and a global microchip glut that hit its core memory business.

The South Korean company — one of the world’s largest makers of memory chips and smartphones — said in a statement that operating profit fell to 640 billion won ($478.6 million) — down 95 percent from a year earlier.

Its first-quarter net income fell 86.1 percent to 1.57 trillion won, and sales dropped 18 percent to 63.75 trillion won.

The company said that “overall consumer spending slowed amid the uncertain global macroeconomic environment”.

Samsung also blamed weakening demand for memory chips — which usually generate about half of its profits — and falling chip prices.

The firm’s chip division reported 4.58 trillion won in losses, its first operating loss since 2009 — when the world was emerging from the 2008 financial crisis.

It said this was due to “continued price declines and an increased valuation loss… amid weakening sentiment and continued impacts of inventory adjustments by customers caused by prolonged external uncertainties”.

Demand for memory was “expected to gradually recover” in the second half of 2023, it added, “amid projections that customer inventory levels will have declined.”

The firm is the flagship subsidiary of the giant Samsung Group, by far the largest of the family-controlled conglomerates that dominate business in Asia’s fourth-largest economy.

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Naija Times