By hmimcu 
Recently, Samsung Electronics released a performance guidance announcement for the first quarter of 2023, which has brought a hint of “chill” to the industry due to the significant decline in performance.
According to the financial report, in the first quarter of 2023, Samsung Electronics is expected to have a revenue of approximately 63 trillion won (approximately 330 billion yuan), a year-on-year decrease of approximately 19%; The operating profit was approximately 600 billion Korean won (approximately RMB 3.13 billion), a year-on-year decrease of 95.75%. Far below analysts’ average expectations, reaching a new low since 2009.
This is also the first time in 14 years since the first quarter of 2009 that Samsung Electronics’ quarterly operating profit has dropped below 1 trillion Korean won.
It is worth noting that Samsung Electronics also announced a production reduction plan during the same period, changing its previous attitude of “absolutely not artificially reducing production” and stating that it will reduce the production of memory chips to a “meaningful level”.
Why did Samsung Electronics’ performance plummet? Industry analysis suggests that it is affected by weak consumer demand for electronic products and excess chip inventory. According to Reinitiv SmartEstimate data, due to the slowdown in global economic growth, customers such as data centers and personal computer (PC) manufacturers have reduced their purchases, resulting in the chip industry facing the problem of excess inventory.
Since the second half of last year, chip prices have continued to decline. Qunzhi Consulting stated that storage chip prices have entered a rapid decline channel since the third quarter of 2022, and in the first quarter of 2023, prices have almost halved year-on-year, approaching cash costs. According to TrendForce data, in the first quarter of 2023, DRAM prices fell by as much as 20%, and NAND Flash prices also fell by about 10% to 15%.