Samsung Electronics has stunned analysts with a grim projection - a 35% plummet in profits for the last quarter of 2023.
The BBC reports that the South Korean tech giant's anticipated operating profit of 2.8 trillion won ($2.13 billion) stands starkly against the anticipated 3.7 trillion won, marking a significant shortfall.
A man walks past the logo of Samsung Electronics at the company's headquarters in Suwon on June 13, 2023.
Consumer Tech Demand Wanes
The unexpected nosedive arrives amidst a global slump in consumer electronics demand, a dire reality that has rattled the tech sector's largest player.
Samsung, renowned for its memory chips, smartphones, and televisions, faced the bitter sting of plummeting memory chip prices in the wake of excessive supplies, hampering sales of laptops and mobile devices.
The pandemic-induced surge in gadget purchases during lockdowns had initially fueled a chip demand spree. However, this tidal wave receded as inventories bloated, resulting in a sharp decline in chip prices last year.
This downward spiral translated into a harsh financial blow for Samsung, mirroring a pattern of consecutive quarterly profit reductions - a staggering 77% dip followed by a staggering 95% plunge in earlier quarters.
Reacting to the grim forecast, Samsung took drastic measures, slashing planned memory chip production. The company stated, "We are lowering the production of memory chips by a meaningful level, especially that of products with supply secured," reflecting a strategic pivot in response to the market's downturn.
The company will release its final earnings report later this month.
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Samsung Talks About Sustainability at CES 2024
However, amid these financial woes, Samsung made a striking statement at CES 2024 in Las Vegas, showcasing a resolute commitment to sustainability. In a keynote address echoing Apple's recent moves, Samsung unveiled ambitious initiatives focused on environmental responsibility.
Inhee Chung, Samsung's VP of corporate sustainability, underscored the company's efforts, highlighting the integration of recycled materials in flagship products (via TechCrunch).
The Galaxy line, for instance, now incorporates recycled fishing nets, while recycled plastic and aluminum find their way into TVs and bespoke refrigerators, a clear demonstration of Samsung's eco-conscious design philosophy.
Moreover, Samsung showcased innovations designed to minimize energy consumption, like SmartThings AI Energy Mode. The company reported a significant surge in SmartThings energy users in 2023, a commendable 75% increase, although exact figures were not disclosed.
The tech giant also announced an intriguing collaboration with Tesla, integrating SmartThings energy with Tesla's Powerwall solar inverter and EV charging solutions. This partnership aims to proactively notify users of impending severe weather events and streamline energy-saving automation before power outages.
Most notably, Samsung revealed an ambitious vision extending beyond product lifecycles. The company spearheads initiatives like "35 Renewed" and the "Galaxy Upcycling" project, seeking to refurbish and repurpose old devices.
Collaborating with MIT's D-Lab, Samsung is actively developing methods to divert electronic waste, particularly in marginalized African communities.
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