Samsung forecasts its profits for the last three months of 2022 to decline by 69% to the lowest level in eight years.
The largest manufacturer of memory chips, smartphones, and televisions in the world predicted that its operating profit for the time period will drop to roughly 4.3tn won ($3.4bn; £2.8bn).
It occurs as the recession in the world economy affects the cost of memory chips and the demand for electronic devices.
As customers tighten their belts, global technology giants have recently taken a hit.
It was Samsung’s lowest quarterly profit since 2014 and fell short of 5.9 trillion won in investor estimates.
The South Korean company claimed that when clients reduced their supplies of the essential parts for digital gadgets, there was a greater-than-anticipated decline in demand for computer chips.
“For the memory business, the decline in fourth-quarter demand was greater than expected as customers adjusted inventories in their effort to further tighten finances,” Samsung said in the statement.
“Smartphone sales and revenue decreased due to weak demand resulting from prolonged macro issues,” it added.
On January 31, Samsung is expected to release its complete financial statement.
It is the most recent major technological corporation to discuss the effects of the global economic downturn on its operations.
Sales have also slowed after the pandemic’s spike in demand, when customers at home spent a lot online.
Tens of thousands of jobs are being lost throughout the worldwide technology sector as a result of slowing sales and mounting worries about a recession.
Author-Roberta Appiah
