Samsung Expects Lowest Quarterly Profit in Eight Years

Samsung Electronics is bracing for its worst fourth-quarter performance since 2014 after a marked drop in worldwide demand for memory chips and smartphones.

Profits are expected to sink by 69% to $3.4 billion for the October-December period, the South Korean technology giant announced this week. Lackluster demand for an array of technology products was driven by poor consumer finances because of high interest rates and softening spending outlooks.

As the world’s biggest memory chip, smartphone and TV maker, Samsung normally reflects the health of global consumer demand. Ever-climbing worldwide interest rates have affected the cost of living in many places, dampening demand for Samsung’s smartphones as well as those of rivals like Apple.

Analysts are warning of a tough time ahead for technology stocks. The poor performance of memory chips and display accessories has also been affected by Apple’s production delays at the world’s biggest iPhone factory in China during the same quarter.

Samsung has said it is concerned by the consumer outlook for 2023. Already, analysts expect a further drop in Samsung’s profits in the current quarter, with an operating loss for the chips business envisioned.

It is the latest major technology company to be affected by weakness in the global economy. Sales have also slowed after demand boomed during the pandemic when customers at home spent a lot online.

Many thousands of jobs are being lost across the wider technology industry. This week Amazon said it would slash more than 18,000 jobs and, in November, Meta announced that it would cut 13% of its workforce.