Samsung Profits Plunge by 96%

erek

erek

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They're cutting chip production to help

"Smartphone and personal computer makers ramped up purchases of chips during the Covid-19 pandemic, when demand for consumer electronics soared as people were stuck at home during lockdowns. This led to a global chip shortage. However, demand has waned as consumers cut back on bigger purchases amid the cost of living crisis, with food and energy bills soaring. Samsung said demand had dropped because of a weaker world economy and companies buying fewer chips as they run down their inventories. "We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured," the company said, referring to customers with sufficient inventories."

Source: https://tech.slashdot.org/story/23/...o-cut-chip-production-as-profits-plunge-by-96
 
More evidence that all of the inflation in the PC sector is built on a house of cards. If no one is buying memory, then no one is buying everything else to make a PC.
The first quarter results, with all the top 4 OEMs profits tanking go hand in hand with this.
 
UnknownSouljer said:
More evidence that all of the inflation in the PC sector is built on a house of cards. If no one is buying memory, then no one is buying everything else to make a PC.
The first quarter results, with all the top 4 OEMs profits tanking go hand in hand with this.
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Haven’t needed to buy a new cpu which would force me to upgrade ram and motherboard

Don’t see a big enough benefit @ 4K resolution to upgrade off of my 5950X

If I gamed at a lower resolution the numbers are more in favor of upgrading
 
erek said:
Haven’t needed to buy a new cpu which would force me to upgrade ram and motherboard

Don’t see a big enough benefit @ 4K resolution to upgrade off of my 5950X

If I gamed at a lower resolution the numbers are more in favor of upgrading
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I'm purely speaking about big picture. The way enthusiasts buy computers is not the way 90%+ of the market buys computers.

Plummiting RAM sales means no one is buying laptops. No one is buying Dells, HP's, Acer's, Mac's, or any other OEM. To put it succinctly if enthusiasts stopped buying computers, that would be a blip in comparison to all the ordinary people not buying computers. However it's worse than that, no one is.

I would say that the people buying PC hardware even if they are enthusiasts are the extreme minority. Again, that being reflected by Samsung's tanking memory sales and all of the big 4s terrible first quarter results. nVidia and AMD both also have sold the least amount of GPU's in a quarter ever. Including during the 2008-2010 recession.
 
Uhh, the so called "Global economic model", aka Banksters fiat, is collapsing fast. Why this little sheltered group called "hardware enthusiasts" are only seeing that is priceless! May I suggest you grab as many HW as possible and hunker down? For sure you can trade for food to nerds when the need presents its self.
 
M76 said:
Speaking of big picture there are chips now in everything, not just computers. People aren't buying any appliances or electronics period. Or new cars for that matter.
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It's this scene from the Big Short all over again....



The usual fuckers (VC's, hedge fund bros, Wall Street, etc) are probably unloading all their bags onto retail before the markets implode.
 
A) "If you fail to plan, then you plan to fail"

B) "stupid is as stupid does"

C) "A failure to plan on your part does NOT constitute an emergency on my part"

Boohoohoo...A big corp losing money, boohoohoo..yea, I'm sooooooo upset by this news that I can't even sh*t straight...hehehehe

Surely, a company as big & diverse as Sammy has the $$ reserves to get thru such a downturn like this....

And if they don't, then they deserve whatever pitfalls that come as a result of their failure to plan for such an event, and/or being stupid enough to think that the 'Rona spending splurge would continue indefinitely :D

They should start by firing all their so-called "bean counters" to cut some expenses asap.....then suspend all exec bonuses & stock buy backs, and ground all their learjets, perhaps that will help ease the burden a little :)
 
alxlwson said:
What a shortsighted comment...
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Don't get me wrong, I don't wanna see any tech company fail, but it is what it is, and the damage has been done. Hopefully, they will just tighten up the purse strings and get back to doing what they do, but I am 100% certain that the very 1st thing they will do is start laying off the little people that make their stuff (and $$) for them, and THAT is gonna hurt everyone even more than the company losing a little $$ :)
 
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M76 said:
Speaking of big picture there are chips now in everything, not just computers. People aren't buying any appliances or electronics period. Or new cars for that matter.
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I was pricing a kitchen for a client last week and to my delight there was a section of high end appliances that proudly declared their 10 year warranty and total lack of computational capability.

We may get new appliances here in the Twisted Cabin one day yet.

Of course, I would happily spend a quarter million on a new kitchen, and these appliances are extremely expensive.
 
Blade-Runner said:
It's this scene from the Big Short all over again....



The usual fuckers (VC's, hedge fund bros, Wall Street, etc) are probably unloading all their bags onto retail before the markets implode.
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Trust fund bros or hedge fund bros?
 
1680967350694.png

https://developers.slashdot.org/sto...ted-for-pasting-proprietary-code-into-chatgpt
 
dogDAbone said:
Don't get me wrong, I don't wanna see any tech company fail, but it is what it is, and the damage has been done. Hopefully, they will just tighten up the purse strings and get back to doing what they do, but I am 100% certain that the very 1st thing they will do is start laying off the little people that make their stuff (and $$) for them, and THAT is gonna hurt everyone even more than the company losing a little $$ :)
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So you recognize the downside to the big company posting these kind of losses(hurts the little guy in the end), but you post a comment like this?? I guess I don't understand.
dogDAbone said:
Boohoohoo...A big corp losing money, boohoohoo..yea, I'm sooooooo upset by this news that I can't even sh*t straight...hehehehe
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Twisted Kidney said:
I was pricing a kitchen for a client last week and to my delight there was a section of high end appliances that proudly declared their 10 year warranty and total lack of computational capability.

We may get new appliances here in the Twisted Cabin one day yet.

Of course, I would happily spend a quarter million on a new kitchen, and these appliances are extremely expensive.
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Samsung appliances in general are garbage and attribute to all this too and are also caused by all this too (bad chips/products/products with chips in it)
 
M76 said:
LOL, so like the high end audiophile market. Charge exorbitant sums for giving you obsolete stuff. Brilliant.
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Think of it more as removing carefully engineered points of failure and charging extra for the complex engineering you didn't have to do...

Designing a product to die fast is easy, designing a product that lasts as long as possible is easy. Designing a product that lasts just long enough to run out of warranty and not feel like a rip off is incredibly complicated to do. You can't just have one point of failure, people will make off-brand replacement parts, you need a plethora of failures in parts that are prohibitively expensive for your victims customers to repair.
 
american companies dont even post profits. samsung stock is actually up on this news. revenue only down a couple percent? Lot of weird comments in this thread
 
Twisted Kidney said:
Think of it more as removing carefully engineered points of failure and charging extra for the complex engineering you didn't have to do...
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Are you sure they do any actual engineering, and not just remove or bypass the "smart" stuff and call it a day?
Twisted Kidney said:
Designing a product to die fast is easy, designing a product that lasts as long as possible is easy. Designing a product that lasts just long enough to run out of warranty and not feel like a rip off is incredibly complicated to do. You can't just have one point of failure, people will make off-brand replacement parts, you need a plethora of failures in parts that are prohibitively expensive for your victims customers to repair
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My main problem is that I can't even find appliances that fit my needs. I wanted to replace our oven last year, but they no longer make ovens with slide out trays, so I guess I have to keep using it until it dies completely.
 
Yeah, Samsung's memory division is hurting, like they all are. It's a great time to be a consumer. Cheap cheap sets of memory, SSDs and m.2s everywhere you look. Hell yeah, its our turn to get some for once.

Samsung will be fine. Memory is a drop in their bucket but yeah, chicken littlin it is so much more fun! 😆
 
Welcome to Pluto in Aquarius, Next 4 months will show us the next 20 years will look like. Welcome to world for next 20 years, everything we once knew will not be same ever again.

This has not happened in our lifetimes.

People will start feeling differently, people will notice people acting differently about money, friendships, family's, this will change world as we knew it and its been happening slowly over past 3 years.

Call me crazy, the facts check out.
 
flegg said:
american companies dont even post profits. samsung stock is actually up on this news. revenue only down a couple percent? Lot of weird comments in this thread
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Can you post information on their revenue? The Guardian article states this:
Samsung estimated its operating profit fell to 600bn won between January and March, from 14.12tn won a year earlier, the lowest profit for any quarter in 14 years. It will report detailed figures later this month.

Analysts are forecasting that its chip division, which usually generates about half of group profits, will report a record loss of 2.1tn won in the quarter.
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https://www.theguardian.com/technology/2023/apr/07/samsung-to-cut-chip-production-as-profits-plunge

I'm not sure how it's remotely possible that the group responsible for half of Samsung's profit, posting a massive negative (2.1 trillion won is roughly $1.6 billion in US dollars) would only result in a "few percentage points" down on revenue.

It also states that their operating profit as a whole fell from $1.6 billion to $455 million. Unless that $455 million is 100% revenue, I'm not sure how that is supposed to cover the deficit in their loss.

Said simply: Samsung as a whole is down 2/3rds of their operating profit. So you'd have to post some pretty solid info to the contrary to state that their "revenue [is] only down a couple percent".
 
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UnknownSouljer said:
Can you post information on their revenue? The Guardian article states this:

https://www.theguardian.com/technology/2023/apr/07/samsung-to-cut-chip-production-as-profits-plunge

I'm not sure how it's remotely possible that the group responsible for half of Samsung's profit, posting a massive negative (2.1 trillion won is roughly $1.6 billion in US dollars) would only result in a "few percentage points" down on revenue.

It also states that their operating profit as a whole fell from $1.6 billion to $455 million. Unless that $455 million is 100% revenue, I'm not sure how that is supposed to cover the deficit in their loss.

Said simply: Samsung as a whole is down 2/3rds of their operating profit. So you'd have to post some pretty solid info to the contrary to state that their "revenue [is] only down a couple percent".
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Samsung is a gimongous company. I just googled their yearly revenue for you - $245.7 billion. I'll let you figure out the basic math there and use a dictionary for the finance terms.

I will apologize in this regard though - their revenue is actually up (not down a couple %)

To help out the helpless around here though - Samsung posted a record high revenue in 2022. Their stock is up on all of this news. You're welcome.

This is classic pseudo-misinformation stuff to manipulate prices so the big boy traders and banks can take advantage, the kind of stuff Jim Cramer did in his prime (long time ago) to make cheesy money and admitted to in his famous interview on youtube.
 
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flegg said:
Samsung is a gimongous company. I just googled their yearly revenue for you - $245.7 billion. I'll let you figure out the basic math there and use a dictionary for the finance terms.

I will apologize in this regard though - their revenue is actually up (not down a couple %)
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Sure, let's talk accounting terms. I apologize, I got it backwards.

Revenue is how much income a company makes before any expenses come into account.
Their net income, which is their [revenue - expenses] was "only" $42.27 billion dollars in 2022.
Samsung electronics net income for 2022, was a paltry 46.2 million US dollars, as per their own income statements in their investor reports.

245.7 billion revenue sounds great, except that isn't actual profit. Experiencing a loss of 2 billion dollars is still significant to Samsung though that's "only" 1/20th of their remaining net profit for the year. And for Samsung electronic specifically, that much loss to operational profit is absolutely relevant.
flegg said:
To help out the helpless around here though - Samsung posted a record high revenue in 2022. Their stock is up on all of this news. You're welcome.
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As indicated above, revenue isn't a good indicator of financial health. There have been plenty of businesses with incredibly high revenues but their net incomes in the negative. If you only look at revenue, you're not actually seeing the real picture.

The Guardians depiction referring to their operating profit, or EBIT, is much more relevant in terms of Samsung's current financial position than simply looking at revenue.
flegg said:
This is classic pseudo-misinformation stuff to manipulate prices so the big boy traders and banks can take advantage, the kind of stuff Jim Cramer did in his prime (long time ago) to make cheesy money and admitted to in his famous interview on youtube.
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Will Samsung be fine? Sure, they have money in the bank and a lot of capital investment, that is without question. But to say this isn't relevant is also not true.

If you're a smart long term investor, they're a buy and hold for 20+ years. They work in the foundry, memory, and consumer electronic segments and are relevant in all three. The only reason to not, would more be because of the possibility of North Korea bombing them into oblivion in that time frame or other similar acts of God. Or if the South Korean government finally stops subsidizing Chaebol's and/or otherwise breaks them up.

I don't think it's smart to buy them immediately though while they're rallying. It would be way better to buy after their first quarter results drop and there is a stock market dip to invest first. Short term if you're a gambler I'd short. Long term, like I said before, buy and hold forever.
 
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erek said:
global chip shortage.
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Signs are starting to appear that the shortage is beginning to ameliorate. I was out on Digikey recently and saw a few ARM Cortex-M chips that have been missing for a year and a half.
 
erek said:
They're cutting chip production to help

"Smartphone and personal computer makers ramped up purchases of chips during the Covid-19 pandemic, when demand for consumer electronics soared as people were stuck at home during lockdowns.
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MBA guy: WOW demand is through the roof! Build more product, at this rate in 2 years demand will double!

erek said:
However, demand has waned as consumers cut back on bigger purchases amid the cost of living crisis, with food and energy bills soaring.
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MBA guy: oops!
 
1_rick said:
I understand the claim, but I went to best buy's website and found two, both of which have slide-out racks in the oven part and the warming drawer underneath.

For example, https://www.bestbuy.com/site/samsun...aning-stainless-steel/6398101.p?skuId=6398101
6398101cv14d.jpg;maxHeight=2000;maxWidth=2000
6398101cv12d.jpg;maxHeight=2000;maxWidth=2000
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Unrelated, but do induction stoves work well? Just wondering for when I actually decide to replace my old gas stove. Samsung isn't going anywhere despite revenue declining. The whole economy is in decline because basic necessities cost an order of magnitude more in some cases.
 
1_rick said:
I have a single-burner induction hotplate and I love it. You just gotta make sure your cookware is compatible with it (e.g., not aluminum).
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Well I mostly use really old cast iron, I'm sure i'd be okay :)
 
I mean profits are down 96% but up till now they were up almost 100% so... back to where they were ~2019 before all the panic buying.
This is good because costs on materials exploded as demand went up, with them cutting back on production others will too, demand will settle, costs will re-adjust, and once supply that was purchased at inflated prices gets used up we can finally get back to a state of normal.
 
After 4 years of extortion pricing for GPUs, people are moving on to hobbies that don't require much more than the cheapest internet client. I'd rather pay 20$ a month to OpenAI for ChatGPT Plus than invest that money in hardware. What I have is overall good enough for the rather simple indie games than I enjoy. And my Z Fold 2 does more or less the same as the Z Fold 4.
 
1_rick said:
I understand the claim, but I went to best buy's website and found two, both of which have slide-out racks in the oven part and the warming drawer underneath.

For example, https://www.bestbuy.com/site/samsun...aning-stainless-steel/6398101.p?skuId=6398101
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He probably means something like this https://www.bestbuy.com/site/forno-...-oven-stainless-steel/6470051.p?skuId=6470051

The easy slide racks can support a lot more weight than just the standard removable racks but you only see it on high-end ovens now a days.

Decko87 said:
Unrelated, but do induction stoves work well? Just wondering for when I actually decide to replace my old gas stove. Samsung isn't going anywhere despite revenue declining. The whole economy is in decline because basic necessities cost an order of magnitude more in some cases.
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The best thing about induction is the surface stays clean and it gets hot FAST, like boil water in 2 minutes. It gets so hot one of my pans started glowing red and almost melted because apparently using power boil on a small saucepan is not a good idea.

Downside is heating is mostly center focused unless you get expensive clad pans or just use cast iron. You also have to constantly play with the temps up and down while cooking because some stoves go from a slight sizzle to scorching in 1 increment, heat control is a bit of an issue. Attach files
 
Memory is a boom and bust business. There are only 3 major DRAM manufactuers left (and I guess about 5 flash manufacturers?). They will all survive and be just fine. Enjoy the low prices.
 
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