Samsung earnings to drop practically 100% YoY in Q1 2023

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Ryan Haines / Android Authority


  • Samsung earnings are forecast to drop by 95.8% yr over yr in Q1 2023.
  • If this pans out, it will likely be the worst revenue quarter for the model since 2009, earlier than it had even launched the primary Galaxy S smartphone.
  • A decrease demand for chips — 55% of the corporate’s earnings — is probably going the most important offender.

Just some days in the past, we reported that the Samsung Galaxy S23 collection is promoting fairly effectively, with the Extremely variant main the cost. Nevertheless, Samsung is a gigantic firm, and simply because its cell division seems to be doing positive doesn’t imply the corporate as a complete is doing effectively.

Living proof, Samsung at this time introduced its earnings guidance for Q1 2023 (h/t Ars Technica). The numbers introduced are fairly sobering. In line with the corporate’s personal metrics, it stands to report a revenue drop of 95.8% yr over yr (YoY) when in comparison with Q1 2022.

The steering sheet says we should always anticipate Samsung earnings to be about 600 billion Korean gained (~$450 million) for Q1 2023. Evaluating that to the 14.12 trillion gained in revenue ($10.7 billion) for Q1 2022, you may see how dire issues actually are.

If this all pans out, Q1 2023 might be Samsung’s worst quarter since 2009, at the very least so far as earnings are involved. For the sake of context, that’s one yr earlier than the very first Samsung Galaxy S cellphone launched.

Samsung earnings drop: What’s taking place?

Samsung’s steering sheet doesn’t give a lot of a proof as to why earnings fell so sharply. Nevertheless, all indicators level to very weak demand for the corporate’s chips. Though Samsung-branded telephones, TVs, computer systems, and so forth., are essentially the most seen merchandise shoppers see, that’s not the place Samsung will get most of its cash. As an alternative, its parts division is what brings within the money. This contains RAM sticks, reminiscence, NAND storage, and different merchandise that seem all the world over in gadgets from different firms — together with main rivals, resembling Apple.

DigiTimes means that element gross sales make up about 55% of Samsung’s income. In different phrases, if element gross sales go down, the whole firm goes down.

Allegedly, Samsung is sitting on a stockpile of unsold chips. It’s seemingly the corporate will cut back manufacturing considerably and work out methods to unload this stockpile. Nevertheless, a report from The Korea Bizwire in November suggests Samsung is as an alternative hoping for a rise in chip demand to maneuver the stock. That stance seemingly has modified in gentle of this regarding earnings steering.