Samsung Reports Staggering 95% Drop in Profits

Posted by: Nakash Khan Comments: 0

Samsung’s Q1 earnings guidance reveals a dismal picture, worse than anything observed in the last ten years. The sales forecast is around $48 billion, down by 10% QoQ and almost 20% YoY.

Operating profit is projected to be a meager $455 million, representing a six-fold decrease from the previous quarter and an astounding 95% drop from the $11 billion profit generated during the same period last year.

This is something that a few Samsung employees might have overlooked before sharing confidential information with the chatbot.

According to The Economist Korea, after Samsung’s semiconductor division permitted engineers to use ChatGPT, workers disclosed confidential information to it at least three times. One employee requested the chatbot to examine sensitive database source code for errors, another asked for code optimization, and a third fed a recorded meeting into ChatGPT and asked it to produce minutes.

Samsung announced that it will significantly reduce the production of memory chips due to persistently weak demand. The poor performance of this division has resulted in the worst profit results for the company since 2009, according to Samsung.

At home, Samsung Group is the largest family-owned conglomerate in South Korea, known as a “chaebol.” The company accounts for over 20% of the country’s domestic GDP, exacerbating economic difficulties in the region.

This marks the second consecutive quarter of significant decline, as Q4 2022 saw profits plummet by nearly 70%. Samsung had previously attributed this decline to the war in Ukraine and inflation, but it is evident that the company’s profitable streak in memory chips has come to an end and it must explore other avenues to restore profitability.

Keep in mind that this is only a guidance report and actual results are not here yet. The final results could be a little better than the bleak predictions, but it’s clear that things are not looking good for Samsung for the time being.

Leave a Reply

Your email address will not be published. Required fields are marked *

Open chat
Hi 🤩,

Is there anything that I can assist you with?