Samsung Estimates A Mega 32% Decline In Profits Due To Less Demand For Electronic Devices

Leading tech giant from South Korea, Samsung, has openly spoken about how they’re expecting a 32% decline in profits. The news comes as the demand linked to electronic products falls as is the case with memory chips too.

This is all thanks to the current economic downturn that many firms are forced to experience worldwide. On average, the famous South Korean organization says the operating profits were estimated to be near 10 trillion Korean won or $7 billion (USD).

The report by the company was published on Thursday where the chip maker said it was struck by a decline in computer demands. But it’s not awfully surprising because many people are finding it so much harder to pay for living expenses, let alone luxuries.

The company is known to generate most of its profits through the production of microprocessors and hence that’s why it suffered so much as the worldwide price for memory chips went down as the demand for electronics weakened.

These estimates that are outlined are set for the next three months and hence they’re turning out to be the firm’s first YoY fall in profits in nearly three years. The company’s earnings report will come out toward the end of the month and that’s where we can get a better idea of what has occurred.

On the other hand, the estimates related to AMD’s revenue in Q3 were nearly $1 billion less than what was predicted in the past. This outlines a huge slump in the demand for computer chips and how it can turn out to be a total disaster than anticipated.

AMD’s chief knows that and that’s why she mentioned that it comes at a time when the market for PCs is greatly weakening. And this coupled with an economic downturn has resulted in poor demand.

Let’s not forget how the firm’s shares also fell by nearly 4.5% recently and we might be seeing a common trend arise for firms during the next half of 2022, thanks to poor consumer demand.

As reported by the BBC, the sales for all types of electronics were affected due to the increase in inflation, the Russian war against Ukraine, and also due to high rates of interest. These factors combined result in firms purchasing memory chips in much lower quantities than before. Hence, they’re forced to use their stocks piled up from before.

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