Samsung Electronics Co.’s
005930,
first-quarter net profit slid 86% from a year earlier, with its semiconductor segment posting a large loss amid a downturn in the chip industry.
Chip demand will likely continue to be sluggish through the second quarter before gradually recovering in the second half, the South Korean tech giant said Thursday.
Net profit for the quarter ended March was 1.575 trillion won ($1.18 billion), compared with net profit of KRW11.325 trillion in the same quarter a year earlier, the company said.
The company’s chip-making segment posted an operating loss of KRW4.580 trillion in the quarter.
The results beat a FactSet-compiled consensus forecast for net profit of KRW821.00 billion.
Revenue fell 18% on year to KRW63.745 trillion, while operating profit dropped 95% to KRW640.20 billion. They were both slightly above the company’s preliminary forecasts.
Samsung’s profit plunge reflects the global memory-chip industry downturn, as an economic slowdown, high inflation and geopolitical tensions have prompted corporates and consumers to cut spending on PCs, smartphones and servers, which usually drives demand for semiconductors.
The company recently joined its chip-making competitors in dialing back investments and production capacity to address the supply glut, weak demand and lower product prices.
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Tyisha Serna