(Seoul) South Korean tech giant Samsung Electronics on Tuesday announced a 37.7% drop in net profit in the third quarter (July-September) compared to the same period last year, despite the release of new phones that boosted its sales.
The company’s net profit stood at 5,840 billion won ($4.3 billion) in the third quarter, compared to 9,390 billion won ($6.7 billion) over the same period in 2022.
However, it has more than tripled compared to the second quarter of 2023.
Samsung Electronics also reported third-quarter operating profit of 2.4 trillion won ($1.7 billion) on the back of strong sales of flagship models in the mobile phone field and strong sales. request for screens”. This represents a fall of 77.57% year-on-year.
The group declared at the beginning of October to expect a drop of 77.9% in its operating profit due to weak global demand for semiconductors.
Although down sharply compared to 2022, this figure is well above the operating profit of the first quarter (640 billion won, the lowest since 2009) and the second quarter (670 billion won).
Its turnover amounted to $50 billion over the period, compared to $57 billion last year, a drop of 12%.
Samsung Electronics is the world’s largest smartphone maker and the flagship subsidiary of the Samsung Group, by far the largest of the family empires that dominate the South Korean economy.
The company explained that “system semiconductor profits were impacted by a delay in the recovery of demand for key applications.”
The income of its professional network branch has “declined in the main foreign markets, as mobile operators have reduced their investments”.
The South Korean giant, however, hopes for better conditions in the chip sector in 2024, even if “macroeconomic uncertainties are expected to persist”.
“Demand for servers for generative artificial intelligence, high-density and high-end products remained strong” compared to that for conventional servers, said the group, which plans to expand its AI offering. .
South Korean processor makers, led by Samsung, had posted record profits in recent years thanks to rising prices and booming demand during the COVID-19 pandemic.
But the trend reversed after the crisis and due to the global economic slowdown.
Samsung notes, however, that it is likely that demand will start to rise again in 2024, supported by “replacement cycles of products sold during the initial phase of the pandemic”, notably smartphones and computers.