Electronics giant Samsung (SSNLF) has reported that its operating profit in this year’s first quarter plunged 95% as demand for its semiconductors weakened.
The company, which reports its earnings in Korean won, reported that its revenue fell 18% year-over-year in Q1, and came in lower than analysts had expected, according to Refinitiv data.
Samsung’s operating profit plunged 95% to the equivalent of $478.55 million U.S., which is the
company’s lowest operating profit since the first quarter of 2009.
Samsung blamed the poor earnings on weak demand for its semiconductors, which consist largely of memory chips that go into personal computers and smartphones.
During the pandemic, smartphone and computer makers stockpiled semiconductors and microchips as demand for consumer devices skyrocketed.
However, those smartphone and PC companies are now grappling with excess inventories as consumers cut back on purchases due to inflation.
South Korea-based Samsung said it would be making a sizable cut in its memory chip production going forward.
Samsung also said it expects limited demand recovery in this year’s second half as large-scale data centres invest more conservatively and its customers continue to adjust their inventories.
Samsung’s stock, which is traded on the South Korean exchange, is flat (down 0.32%) over the last 12 months.
