Samsung warns of 32% hit to profits on chip slump

The worldwide economic recession has led to a 32% decline in demand for electronic devices and the memory chips that power them. As a result, the technology giant Samsung has predicted a 32% decline in its profitability.

The South Korean firm estimates that its quarterly operating profit was approximately 10,8 trillion won ($7.6 billion; £6.9 billion).Infomation Guide Nigeria

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Advanced Micro Devices (AMD), an American chip manufacturer, also reported a decline in computer demand on Thursday.

As the cost of living rises, consumers are reducing their spending.

Samsung’s profitability from its microprocessor manufacturing division declined as the global price of memory chips plummeted due to a decline in consumer electronics demand.

The predictions, which pertain to the three months to September’s end, represent the first annual decrease in quarterly profits for Samsung in nearly three years.

On October 27th, Samsung will report its profits.

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In the meantime, AMD‘s revenue predictions for the third quarter were almost $1bn (£895.6m) less than originally anticipated, indicating that the decline in chip demand could be far more severe than anticipated.

Lisa Su, chief executive officer of AMD, stated that the PC (personal computer) industry saw a considerable decline during the quarter.

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She said that demand was lower than anticipated because to weak economic conditions.

“This is going to be a common theme for companies in the second half of 2022 due to weakening consumer demand,” Neil Shah from market analysis firm Counterpoint Research told the BBC.

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