SEOUL (UPI) — South Korea’s Samsung Electronics announced Friday that its third-quarter operating profit is expected to be $7.66 billion, down a whopping 31.7% from a year ago.
It’s the lowest profitability level for the company since the first quarter of 2021 and falling short of the $8.3 billion market consensus leading up to the announcement.
The Seoul-based company said, however, that revenue remained steady at $53 billion during the July-September period, a slight 2.73% increase year-on-year.
Weakening demand for semiconductors, smartphones, and computers appears to be weighing on the performance of the world’s largest manufacturer of memory chips and mobile phones.
Samsung did not provide a breakdown, but U.S. chip industry tracker ICInsights expected that Samsung’s 3Q semiconductor sales to be $18.29 billion, down 19% from a year before.
If so, it would mean the company would be ceding its top position in semiconductors to Taiwan’s TSMC, which reported 3Q sales of $19.4 billion, a 48% increase from last year.
It would mark the first time that TSMC outperformed its primary rivals Samsung and Intel in quarterly sales.
“Consumers are tightening purse strings as the global economy enters a downturn. In such an environment, many high-tech companies are going to suffer,” South Korean consultancy Leaders Index CEO Park Ju-gun told UPI News Korea.
“Samsung Electronics is no exception as the chip industry languishes due to diminished demand for semiconductors. By contrast, TSMC is faring quite well thanks to its flourishing foundry business. This trend is likely to continue for a while,” he added.