Samsung's Q1 Earnings Plummet Nearly 96% As Memory Chip Market Slows

Samsung's first-quarter operating profit is reported to have declined by 95.8% compared to the same period last year, according to a report from Nikkei Asia. The company forecasts a possible operating profit of 6 trillion Korean won (approximately 455 million US dollars) for the three months ending in March, a significant decrease from last year's 14.1 trillion won. Samsung also expects its revenue to decrease by 19% to 63 trillion won during the same period.

These forecasts are lower than the data collected by research firm FnGuide, which predicts Samsung's quarterly operating profit to be 1 trillion won and revenue to be 64.2 trillion won, based on data from 22 securities brokerages. Although Samsung admits that its memory business is deteriorating, it has not released any department-specific figures. Analysts estimate that the company's semiconductor business may face an operating loss of over 4 trillion won this quarter.

Samsung is the world's largest memory chip manufacturer, occupying approximately 40% of the DRAM and one-third of the NAND flash memory markets. However, the demand for products such as servers, smartphones, and laptops remains weak, and NAND flash memory is still oversupplied. TrendForce, in a report last week, said that the key to balancing supply and demand in the market is whether NAND suppliers can further reduce production.

Samsung has announced that it is reducing the production of storage chips, a decision that investors support as the company's stock rose nearly 4% in early trading. It is important to keep track of Samsung's financial performance as it can affect the prices and availability of their products in the market.