Samsung says second-quarter working revenue fell 95%

Working revenue from the April to June interval was 668.5 billion received ($525.3 million), down from 14.1 trillion received from a yr earlier, Samsung mentioned in a press release.

This marks the agency’s worst quarterly revenue for the reason that first quarter of 2009.

Samsung’s second-quarter internet revenue fell 84.5 per cent to 1.72 trillion received, and gross sales dropped 22.3 per cent to 60 trillion received.

The agency – one of many world’s largest makers of reminiscence chips and smartphones – blamed weak demand for its chips and cellphones, however provided an optimistic outlook for the rest of the yr.

“International demand is predicted to progressively get well within the second half of the yr, which ought to result in an enchancment in earnings pushed by the element enterprise,” it mentioned, however added “continued macroeconomic dangers may show to be a problem.”

South Korean chipmakers, led by Samsung, loved file income lately as costs for his or her merchandise soared, however the world financial slowdown has dealt a blow to reminiscence chip gross sales.

Demand swelled through the pandemic as shoppers purchased computer systems and smartphones throughout lockdowns, prompting chip makers to ramp up manufacturing.

However demand rapidly diminished as lockdowns lifted and weakened additional within the face of hovering inflation and rising rates of interest.

Joanne Chiao, an analyst at market analysis agency TrendForce, mentioned output would lower additional – by an estimated 9.3 p.c – this yr owing to a weak total financial system.

“Shopper demand has weakened, resulting in price range cuts by corporations and ongoing order cancellations,” Chiao added.

TrendForce forecast value declines of DRAM chips – usually utilized in PCs and smartphones – to gradual within the second half of the yr as chipmakers tighten provide after costs plunged as a lot as 18 p.c within the second quarter.

In April, Samsung mentioned it will make a “significant” lower in reminiscence chip manufacturing, following the lead of rivals SK Hynix and Micron.

The latest drop in income has not deterred the agency from making daring investments.

In March, it unveiled plans to contribute $227 billion over the following twenty years to constructing the world’s largest chip centre in Yongin, south of Seoul.