Samsung’s profits slump
Samsung has published its sales and earnings figures for the first quarter of 2023. They are much more negative than a year ago. Compared to other chip manufacturers, however, Samsung is doing well.
Profit down 96 percent
In the first quarter of the current year, Samsung suffered a severe drop in profits of 96 percent. The company thus joins a long list of chip companies that are currently weakening. Chip-producing companies were in an outstanding position just a year ago due to the global chip shortage: high demand with minimal supply secured them well financially. However, in the context of inflation, which has picked up significantly in many countries since then, the tide has turned. Chips are once again available, but demand for corresponding products has declined due to inflation-induced lean consumer sentiment. The changed relationship between supply and demand is putting companies in the industry under pressure.
Samsung is in a comparatively good position – also due to the fact that the company produces a wide variety of electrical goods for different target groups. It is still in the black: Sales fell by 19 percent to around 43.8 billion euros and profits by 96 percent to around 417 million euros. Some of its competitors, on the other hand, are posting losses. Micron, for example, was economically forced to cut more than 7,000 jobs after the company’s sales and profits plummeted.
The further development is hardly foreseeable so far, both for Samsung and for the entire chip industry. If the slump continues, some companies could face serious difficulties. Samsung, however, does not seem to be too badly affected so far. The company only recently presented big plans: VR glasses and satellite communication for the smartphone are on the agenda for the near future.
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