Samsung has reportedly suffered a staggering drop in its revenues in the first quarter (Q1) of 2023. The report from CNBC shows that the South Korean tech giant saw its profit plunge by a massive 95 percent in its year-to-year earnings.
Chip division of the company has been blamed for this abysmal data of the company. The smartphone business hasn’t been discouraging as per the stats. But the company’s overall monetary indicators suggest a sharp fall. Matters like inflation, lower market growth, and the global economic crisis have hit the company head-on in the first three months of 2023.
To compare, Samsung generated 14.12 trillion Korean won ($10.7 billion) in Q1 2022. This year, the prominent tech leader made a profit of 640 billion Korean won which translates to a dismal $478.55 million. It’s the lowest operating profit Samsung made since Q1 2009.
|Samsung Profit in Q1 2023
|Samsung Profit in Q1 2022
Blame the chip division for the low financial gain
The “missed fortune” for the company though is not attributed to the company’s smartphone business. Samsung’s chip division was the antagonist behind the worst financial return for the company in over a decade period. Besides selling mobile phones, the company also manufactures TVs, home electronics, computers, etc. But its main business such as chips and displays did strikingly poor in the first quarter of 2023.
In its chip division, Samsung reported a loss of 4.58 trillion Korean won ($3.4 billion) in A1 2023. In 2022 during the same period, the company earned 8.45 trillion Korean won in profit ($6.3 billion). The Covid-19 pandemic is seen as the culprit for the staggering loss. During the disastrous health crisis, the company was forced to stockpile chips and now, their prices have dropped while Samsung has been left with a surplus of those chips in its inventory.
|Samsung chip division profit in Q1 2023
|Samsung chip division profit in Q1 2022
Galaxy S23 series making good earning
Despite the frustrating business in the chips department, the smartphone side has done the company some favor. The company’s latest launch Galaxy S23 series has been a strong performer for the OEM. Reportedly, Samsung’s mobile phone business grew by 22 percent and operating profit increased by 3 percent year-on-year.
Particularly, the sales of the premium model Galaxy S23 Ultra have helped the company reach a double-digit profit despite market uncertainties. In another major news, Samsung has announced two-way connectivity via satellite which could be featured in the next year’s Galaxy S24 series or at least in the Ultra variant.
Samsung is a household name in Nepal too with its TVs, refrigerators, smartphones, and other electronic items making their way to most homes. The company has recently inaugurated its historic TV factory in Nawalparasi. Which Samsung products do you use? Do share with us if you have any particular reason to buy from the company in our comments below.
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