Samsung’s Q1 earnings will be impacted by weak semiconductor chip demand
Sluggish economic conditions persist for the last couple of months. Less demand, economic instability, inflation, and many other factors have impacted various sectors of the business industry. In the tech industry, one of the most impacted sectors is the semiconductor chip industry. During the previous years, most of the semiconductor manufacturers bear losses in revenues and annual profits due to poor economic conditions and less demand and supply worldwide.
As of now, some latest reports gathered by Yonhap Infomax suggest that the earnings of the major South Korean manufacturing firms won’t be significant in Q1 2023. These forecasts include Samsung, SK Hynix, and others. It is believed that slow global chip demand has impacted the first-quarter earnings of South Korean chip manufacturing companies.
It is predicted that Samsung Foundry will have an operating profit of KRW 720 billion (roughly $549.7 million) in Q1 2023. It is a significant decline of 94.9% as to figures that were achieved during Q1 2022 i.e., KRW 14.1 trillion or $10.69 billion. Moreover, Samsung’s January-March projection decreased by 17.3% year over year to KRW 64.3 trillion, or nearly $48.4 billion.
Samsung has several strategies to assist grow its semiconductor chip industry
Well, this forecast is a result of global economic conditions. It is not just the chip manufacturing sector; the same projections are estimated for the major South Korean petrochemical companies and steel makers. Given this uncertainty, all companies are trying their best to grow their business.
In addition to this, the company is working to strengthen its core technologies. Samsung is also looking forward to introducing ChatGPT for its chip business. The company believes that the ChatGPT AI model and its services will benefit the chip business in the near future. Besides this, the company has unveiled its plans of building five new memory and foundry facilities in South Korea. Samsung will reportedly invest $230 billion in this project.
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