Shulou(Shulou.com)11/24 Report--

CTOnews.com, April 5 (Xinhua)-- Samsung's first-quarter profit is expected to plunge 92% to its lowest level in 14 years, according to Reuters, as chip glut worsens and buyers such as data centers and computer makers slow purchases amid a global economic slowdown.

Analysts say the launch of the new flagship smartphone is expected to support mobile profits, but its chip division is likely to report a quarterly loss of more than Won3,000bn (CTOnews.com Note: currently about Rmb15.69 billion) due to falling memory chip prices and a sharp reduction in inventory value.

As of 2022, Samsung remained the world's largest maker of memory chips, televisions and smartphones and a bellwether of global consumer trends. Samsung is expected to report preliminary results for the first quarter on Friday and full results later this month.

Samsung's first-quarter operating profit is likely to fall to 1.08 trillion won (currently about 5.648 billion yuan), according to the Refinitiv SmartEstimate of 27 analysts.

This is the lowest level since a profit of 590 billion won in the first quarter of 2009, compared with an operating profit of 14.12 trillion won (currently about 73.848 billion yuan) last year, according to Samsung Electronics.

The price of DRAM memory chips, which are widely used in smartphones, PC and servers, plummeted by about 20 per cent in the quarter, while the price of NAND flash memory chips for data storage fell by about 10 to 15 per cent, according to consultancy TrendForce.

As a result, competitors Micron and SK Hynix have slashed their investment plans, and the chip downturn is expected to last until at least the second half of 2023. By contrast, Samsung has not changed its investment plans. Analysts say the tech giant is taking advantage of the opportunity to expand its market share ahead of its competitors to take advantage of the eventual rebound in demand.

In February, Samsung Electronics said it planned to borrow 20 trillion won (currently about 104.6 billion yuan) from Samsung's display department as working capital until August 2025.

The average estimate of seven analysts suggests that first-quarter operating profit in Samsung's mobile business is likely to fall 9 per cent to 3.46 trillion won (currently about 18.096 billion yuan).

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