Samsungannounced its first Q3 results, which came as a surprise to many, with a lower-than-expected profit decline of 78%. The technology giant’s operating profit for the period covering July-September was 2.4 trillion won (about 1.79 billion dollars). While this figure represents a significant decrease compared to the 10.85 trillion won recorded in the same quarter of the previous year, it is important to consider external factors that contributed to this annual decline, including the slowing global economy and the significant decrease in chip demand.
Despite these challenges, Samsung’s Q3 profits significantly exceeded its performance in the previous two quarters. In particular, only 640 billion won profit was made in the first quarter, the lowest profit since 2009, and 670 billion won profit was made in the second quarter. Samsung’s Q3 operating profit of 2.4 trillion won also surpassed LSEG SmartEstimate’s estimate of 2.1 trillion won.
One of the most important factors affecting Samsung’s performance is the changing landscape in the semiconductor industry. The initial surge in demand for chips triggered by the pandemic began to wane, leading to a sharp drop in chip prices and a subsequent significant economic impact on Samsung, the world’s largest memory chip maker.
To mitigate these losses, Samsung continued to reduce production of older chips while strategically shifting its focus to more profitable, high-end chips such as DRAM. This adaptability and the emphasis it places on optimizing its chip portfolio has played a key role in helping Samsung overcome the challenges posed by current market conditions.