Samsung profits plummet 69% on falling demand for processors

Posted:
in General Discussion
Samsung has reported an eight-year low for its operating profit in its Q4 earnings results, dropping to $3.4 billion from $10.9 billion in the same period a year before.




One reason for the steep decrease in profit is how Samsung supplies many iPhone displays, but Apple has been hit by production delays in China. Then there are also ongoing US sanctions against China, which are affecting many technology firms.

However, according to the Financial Times, Samsung's results are because it has stepped up. chip production even though the market has declined. Samsung reportedly increased memory chip production by 10% in Q4, for instance.

The Financial Times says that Samsung is pursuing a strategy of investing now in order to build market share later.

It's not clear if the fall in profit is more from deferred earnings from supply chain issues, or demand destruction.

This operating profit percent decline is not the company's first, but it is Samsung's worst since Q3 2014. Beyond the operating profit, Samsung reported that it expects overall sales to have declined 9% to $55 billion for the quarter.

Read on AppleInsider

Comments

  • Reply 1 of 4
    danoxdanox Posts: 3,050member
    Samsung is losing marketshare in the smart phone market in the United States, Apple is now slowly carving/grinding out a bigger share of the US market, and probably is on their way to 60% marketshare in the United States by 2024.
    edited January 2023 lolliverwatto_cobra
  • Reply 2 of 4
    badmonkbadmonk Posts: 1,316member
    Yes agree, the last android holdouts in my immediately family and social circle are going iPhone, one of my friends is asking me about the iPhone 14 Pro Max, in part because he has Apple Watch Ultra envy.

    I think all this nonsense about iPhone Pro shipments is nonsense, I think Apple will have a decent quarter, I am seeing iPhone 14 Pro Maxs in the wild and I think the AW Ultra has been a sleeper hit…I know many people who have purchased them and everyone loves it.  It is arguably the best watch value in the world.

    Likewise my brother just bought his family all iPhone 14s (no problem getting the phones) and the iPhone 14 ProMax I ordered from the Apple Store arrived a week early from its projected date of 12/27 so supply constraints seem overblown to me.

    I think great future for Apple but yes China concerns loom large.
    dewmewatto_cobra
  • Reply 3 of 4
    9secondkox29secondkox2 Posts: 2,849member
    Samsung is launching a boatload of new products this year. A lot. In a variety of markets. It’s making a lot of stuff and not selling yet. So that factors in. 

    There’s also the idea that most people want Apple products these days and not Samsung or much else on the android side - especially anything they’re paying a premium for. The sentiment is if it’s free, android is ok. If you pay, you get an iPhone. 

    Then there are the China slowdowns. Then there is inflation (world economic forum is laughing their heads off at this). 

    Their tv unit is healthy. Their washers and dryers are constantly getting dinged for reliability. Their refrigerators are dinged for not lasting that long also. 

    Other than that, Samsung is just a commodity windows and android OEM subject to rises and falls just like the rest. 

    There are many factors going into this. Some are temporary. Some are longer term. 
    edited January 2023 watto_cobra
  • Reply 4 of 4
    The concept of demand destruction is interesting because this is how Samsung display muscled in on the tv market. Pump out lots of displays dirt cheap and kill the (more expensive Japanese) competition. Maybe they are looking to do similar with the flash memory market, although there are different forces at play.
    watto_cobra
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