Samsung’s profits for the current quarter are expected to slide by up to 80% compared to this time last year when the company announces its financial results later this week. The drop is driven by a surplus of computer chips on the market. Chip sales are what drives the tech-maker’s (usually) record-breaking financial performance.
The company is expected to still make a profit from the quarter but it’s a considerable dip from its income last year. Reuters reports that numerous analysts are expecting Samsung’s profits to fall from 10.85 trillion Korean won this time last year to 2.1 trillion won in the current quarter.
Samsung’s chips are down
For those playing the home game, the South Korean tech giant’s profits for this quarter are expected to fall from R154 billion in 2022 to a ‘mere’ R30 billion this year. The major problem for the company isn’t hardware sales, which have performed as expected. Instead, it’s that nobody was purchasing the various chips the Korean outfit makes its money off of.
Instead, various industries opted to use the chips they had stockpiled in a bid to weather the current (and incoming) economic situation. In doing so, they impacted Samsung’s bottom line. It also hasn’t helped that there has been a flood of chips into the market at a time when demand is low, something that prompted Samsung to scale back production.
As with most things financial, this is expected to be temporary. Orders have started coming in again and the Korean company should expect a rebound of its fortunes sometime early next year.