Samsung reports 95% drop in profit, but expects global demand to recover in second half of the year

Samsung Electronics posted a second-quarter profit drop Thursday as weak demand for memory chips persists.

Here are Samsung's second-quarter results versus estimates:

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Samsung reported sales slipped 22% from a year ago, while operating profit plunged 95%. Earlier this month, Samsung estimated second-quarter revenue to be 60 trillion Korean won and operating profit to be 600 billion Korean won.

Samsung is the world's largest maker of dynamic random-access memory chips, which are found in consumer devices such as smartphones and computers.

Global shipments of smartphones are expected to decline 3.2% in 2023 to 1.17 billion units, according to global market intelligence firm International Data Corporation. The firm lowered its forecast from February, driven by factors such as "a weaker economic outlook" and "ongoing inflation."

Smartphone and PC manufacturers are grappling with excess inventories of memory chips after stockpiling to meet increased demand for consumer devices during the pandemic. Inflation has led to consumers cutting back on purchases of these goods, driving down prices for memory chips.

"Our conversations with channels, supply chain partners, and major OEMs all point to recovery being pushed further out and a weaker second half of the year," said Nabila Popal, IDC's research director.

"Consumer demand is recovering much slower than expected in all regions, including China."

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