Samsung started 2023 dominating the market, but the company recently warned that its financial results would drop drastically in this first quarter, and now that this data has been released, we see that the company was right.
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Samsung’s operating profits fell 95% in the first quarter compared to the same period last year, but that does not mean that the company is in crisis, far from it, but rather that it has an explanation.
The main cause is that the company has produced more chips than expected so as not to have shortage problems in the stock, which means that in the face of a drop in demand, they always try to get rid of this surplus.
Samsung profits fall to 2009 levels
Samsung’s first-quarter results show a 95% decline in profit margin from the first quarter of 2022, a figure so low the company hasn’t seen since 2009.
That’s something Samsung itself had anticipated earlier this month, although the company put the figure at 96%, and that’s because its chip business has continued to produce at a higher rate than demand. to make sure she has stock.
Samsung’s processor division accounts for most of its profits, and that’s why the figure is quite high, despite the fact that other businesses of the company have grown during this period.
In total, the company posted net income of about $478 million, compared to about $11 billion in the first quarter of last year.
The company, which has already cut processor manufacturing, is now expected to lower prices slightly to free up inventory and begin its recovery. As they say, it is one of many businesses in Samsung, and other divisions such as mobile phones have managed to grow, with a profit improvement of 3%.
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