Samsung is preparing itself for a huge loss of revenue. Publishing a preview of the first quarter results of 2023, South Korean technology giant Samsung expects an incredible decrease in operating profit. So much so that we wouldn’t be wrong if we say that Samsung has experienced the worst period of the last 14 years. Because the figures show the worst point since the 2009 financial crisis.Samsung cuts production, there is a record loss
A Samsung official signaled production cuts, saying the company had cut its memory chip production to a ‘significant’ level as it adjusted to the significant drop in semiconductor demand to avoid further financial losses. As for operating profit, the company is only said to generate an estimated $450 million, a massive 96 percent drop from the same period in 2022. Meanwhile, first-quarter revenues fell from $59 billion to $47.8 billion.
According to analysts’ expectations, the chip division is expected to report losses of $1.6 billion, indicating that the interruption in memory production will be serious. The loss and production cut decision in the chip department will support the decrease in DRAM prices. Therefore, we can say that the price decrease in RAM and storage solutions will continue in the coming months.Lifeline: Galaxy S23
Amidst all these setbacks, there seems to be a guardian angel protecting Samsung: the Galaxy S23 series. All three models are said to be selling extremely well, especially when compared to the Galaxy S22 family.However, it is unclear how Samsung’s investments will be shaped in 2023. The firm underlined last year that investments will stay at the same level, but this incredible drop could change plans. Competitors Sy Hynix and Micron have already reported drastic cuts to their memory production and investment. A similar move could come from Samsung. For now, these disclosed data are just the tip of the iceberg. The firm will release its detailed financial report later this month.
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