Samsung’s Quarterly Profit Plunges to 8-Year Low on Demand Slump 

Products on display at a Samsung Electronics shop inside the company's headquarters in Seoul, South Korea, 06 January, 2023. (EPA)
Products on display at a Samsung Electronics shop inside the company's headquarters in Seoul, South Korea, 06 January, 2023. (EPA)
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Samsung’s Quarterly Profit Plunges to 8-Year Low on Demand Slump 

Products on display at a Samsung Electronics shop inside the company's headquarters in Seoul, South Korea, 06 January, 2023. (EPA)
Products on display at a Samsung Electronics shop inside the company's headquarters in Seoul, South Korea, 06 January, 2023. (EPA)

Samsung Electronics Co Ltd flagged on Friday its quarterly profit tumbled by two-thirds to an eight-year low as a weakening global economy hammered memory chip prices and curbed demand for electronic devices. 

The dismal profit estimate by the world's largest memory chip, smartphone and TV maker - a bellwether for global consumer demand - sets a weak tone for other technology firms' quarterly results. 

Samsung's profits are expected to shrink again in the current quarter, analysts said, after the South Korean company announced its October-December operating profit likely fell 69% to 4.3 trillion won ($3.37 billion) from 13.87 trillion won a year earlier. 

It was Samsung's smallest quarterly profit since the third quarter of 2014 and fell short of a 5.9 trillion won Refinitiv SmartEstimate, which is weighted toward forecasts from analysts who are more consistently accurate. 

"All of Samsung's businesses had a hard time, but chips and mobile especially," said Lee Min-hee, analyst at BNK Investment & Securities. 

Quarterly revenue likely fell 9% from the same period a year earlier to 70 trillion won, Samsung said in a short preliminary earnings statement. Asia's fourth-biggest listed company by market value will release detailed earnings on Jan. 31. 

Rising global interest rates and cost of living have dampened demand for smartphones and other devices that Samsung makes and also for the semiconductors it supplies to rivals such as Apple Inc. 

"For the memory business, the decline in fourth-quarter demand was greater than expected as customers adjusted inventories in their effort to further tighten finances...," Samsung said in the statement. 

Its mobile business' profit declined in the fourth quarter as smartphone sales and revenue decreased due to weak demand resulting from prolonged macroeconomic issues, Samsung added. 

"Memory chip prices fell in the mid-20% during the quarter, and high-end phones such as foldable didn't sell as well," said BNK Investment's Lee, adding its display business was hurt due to client Apple's production delays at the world's biggest iPhone factory in China during the quarter. 

Three analysts said they expected Samsung's profits to dive again in the current quarter, with a likely operating loss for the chips business as a glut drives a further drop in memory chip prices. 

Samsung shares closed 1.4% higher on Friday, versus a 1.1% rise of the wider market. Shares of rival memory chip maker SK Hynix rose 2.1%. 

"The reason shares are rising despite the poor earnings result is... investors are hoping Samsung will need to reduce production, like Micron or SK Hynix said they would, which would help the memory industry overall," said Eo Kyu-jin, an analyst at DB Financial Investment. 

Samsung had said in October that it did not expect much change to its 2023 investments. Analysts said that Samsung has a history of not announcing memory chip production cuts, but could organically adjust investment by delaying bringing in equipment or in other ways. 



TikTok to Let US Android Users Download App via Kits on Its Website

The TikTok app logo is seen in this illustration taken, August 22, 2022. (Reuters)
The TikTok app logo is seen in this illustration taken, August 22, 2022. (Reuters)
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TikTok to Let US Android Users Download App via Kits on Its Website

The TikTok app logo is seen in this illustration taken, August 22, 2022. (Reuters)
The TikTok app logo is seen in this illustration taken, August 22, 2022. (Reuters)

TikTok said on Friday it was allowing US Android users to download and connect to the short video app through package kits on its website, in an effort to circumvent restrictions on the popular platform in the country.

Apple and Google have not reinstated TikTok to their app stores since a US law took effect on January 19 requiring its Chinese owner ByteDance either to sell it on national security grounds or face a ban.

President Donald Trump, who took office the day after the law went into effect, signed an executive order seeking to delay by 75 days the enforcement of the law.

Trump has said that he was in talks with multiple people over TikTok's purchase and would likely have a decision on the app's future this month. It has about 170 million American users.

The president signed an executive order on Monday ordering the creation of a sovereign wealth fund within the next year, saying it could potentially buy TikTok.

US officials have warned that under ByteDance, there was a risk of Americans' data being misused.

Free speech advocates have opposed TikTok's ban under the law, which was overwhelmingly passed by Congress and signed by then-President Joe Biden.

The company says US officials misstated its ties to China, arguing its content recommendation engine and user data are stored in the United States on cloud servers operated by Oracle, while content moderation decisions that affect American users are also made in the United States.