Samsung profits have tanked in the fourth quarter of last year by a noticeable figure following declining demand of its and slowing sales of its memory chips. There are various reasons for this issue, so here are all the details.

The South Korean tech giant recently share his financial report that showcased that the company saw a sizeable fall of near 70 percent in Q4 2022. This is a major fall in profits compared to the same period last year. There are many reasons for the fall in profits, with low demand for semiconductors and smartphones due to global economic issues. The brand reported that it had expected an operating profit of 4.3 trillion won and a revenue of around 70 trillion won for the fourth quarter of 2022.

However, it saw a revenue drop of approximately 9 percent year on year while its operating profits fell by 69 percent during this same time. Furthermore, the operating profits had also dropped by more than half from the third quarter, which is also when Samsung saw its first year on year profit decline in three years. This was also due to falling chip demand that led to weakening sales in the market.

Samsung added that it saw a significant drop in earnings from the memory business due to lackluster demand while also seeing weaker smartphone sales. It stated that this trend continues amid the uncertainties with the surrounding external factors that have caused a “potential global economic downturn.” The fall in sale also led to a decline in the average sales prices of the chips to lower than expected levels.

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(Via)

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The Global Smartphone Market sales continue to suffer. The sales dropped 4% Month on Month (MoM) and 10% Year on Year (YoY) in May 2022 according to a report. May was the second consecutive month of MoM decline and the 11th consecutive month of YoY decline in sales. The decline is caused due to various factors but inflation, China’s slowdown, and the Ukraine crisis are said to be the prime culprit.

Global Smartphone shipments dropped to 96 million units in May 2022, according to the latest report by market research firm Counterpoint. This is the first time since the first and second quarters of the pandemic hit 2020 that monthly smartphone sales have been below 100 million.

The continued decline is caused due to various factors including but not limited to inflation, China’s lowdown, and the Ukraine crisis. Inflation is causing consumers to stick to their phones and avoid unnecessary purchases.

Global Smartphone Sales (sell-through), May 2022

“The demand for a smartphone especially in the advanced economies is driven by replacement, which makes it a discretionary purchase. And inflationary pressures are leading to pessimistic consumer sentiment around the globe with people postponing non-essential purchases, including smartphones,” said research director Tarun Pathak. “The strengthening US dollar is also hurting emerging economies. A segment of consumers is likely to wait for seasonal promotions before purchasing to offset some of the cost pressures,” Pathak added.

The smartphone market is also severely affected by the lockdown in China and Ukraine crisis. China’s lockdown has been hurting domestic demand and hampering the global supply chain. The Ukraine war has caused the demand to decline in Eastern Europe, says the report.

According to the Counterpoint macro index, the Global smartphone will likely continue bleeding throughout the summer. However, the market is expected to bounce back during H2, mainly due to an improved situation in China and an improvement in the supply-demand balance in the tech supply chain.

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