Samsung Electronics Co reported its worst decline in quarterly revenue since at least 2009, stoking uncertainty over when a year-long electronics and memory chip demand slump will end.
The stock slid 2 percent in Seoul, the most on an intraday basis in more than two months, after the company reported a larger-than-anticipated 22 percent decline in sales to 60 trillion won (US$46 billion). Operating profit plunged 96 percent in the three months ended last month, although at 600 billion won, that surpassed average estimates.
Samsung has borne the brunt of a slowdown gripping the US$160-billion global memory industry, reflecting a wider downturn after a COVID-19-era boom in online activity waned. Inflation and recession fears last year triggered a rapid pullback on consumer and business spending that has since hammered electronics sales worldwide.
Photo: AFP
Despite the disappointing top line, investors remain cautiously optimistic that the memory chip glut is finally easing after more than a year of price declines. Samsung rivals Micron Technology Inc and SK Hynix Inc have signaled that electronics firms are working through bloated stores of memory chips after the post-pandemic collapse in demand for smartphones and computers.
The industry has moved to shore up prices. Samsung said in April it is cutting production after reporting the slimmest profit in 14 years, a significant step towards ending the supply glut.
Micron said last week it passed the low point of the current downturn, while Hynix executives predicted some relief later this year, aided by a recovery in China and AI demand.
Last quarter was “the profit bottom for Samsung in the current memory down cycle,” CLSA analyst Sanjeev Rana said.
“We expect a sharp profit recovery in the second half as memory price declines are decelerating and demand is expected to recover,” Rana said.
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