According to industry sources on Wednesday, South Korea’s largest conglomerate, Samsung CEO Group, recently held a rare gathering of CEOs of all affiliates in an apparent move to ramp up preparedness for a global economic downturn next year coupled with falling chip prices, unfavorable currency rates, and further rate hikes. This move was made in an effort to ramp up preparedness for what appears to be a move to ramp up preparedness for a global economic downturn next year coupled with falling chip prices.
According to industry insiders who requested their anonymity as well as reports from local media outlets, the high-level meeting was held on Monday at the Samsung Electronics Leadership Center in Yongin, which is located in the Gyeonggi Province. According to the sources, Samsung Electronics Chairman Lee Jae-yong, who is considered to be the de facto head of the firm, did not attend the meeting.
According to the sources, the senior executives at the company discussed the business performance of this year and the business objectives for next year at the meeting. They also discussed methods to address the upcoming macroeconomic issues.
It was the first time in six years that the groupwide leadership meeting was held at Samsung. Prior to 2017, a weekly meeting of top executives across affiliates was held at Samsung. Following the dissolution of the Future Strategy Office, which served as the group’s control tower in 2017, the meeting of top executives across affiliates was discontinued.
Throughout the course of this year, Samsung Companies has convened a number of urgent meetings. At the end of June, the chief executive officers of 25 prominent technology businesses, including Samsung Electronics, Samsung Display, and Samsung SDI, got together to discuss the growing risks in the international markets.
According to our sources, Samsung called this meeting on Monday in anticipation of a dismal forecast for the next year. In particular, its crown jewel Samsung Electronics is extremely expected to see losses during the fourth quarter in light of the gloomy forecast for the semiconductor business in the next year.
According to regulatory filings made by Samsung, the company’s operational profit for the period covering July to September fell by 31.4 percent on an annual basis. In the third quarter, the company’s inventory assets increased by 38.5 percent as compared to the end of the previous year. This increase was supported by pent-up worldwide demand for the information technology industry.
The market intelligence company FnGuide predicted that the chipmaker’s operational profit for the fourth quarter would record 7.34 trillion won ($5.79 billion), representing a decrease of around 47 percent year-over-year. In addition, the market tracker forecast that Samsung’s operational profit for the period of January through March would fall by 57 percent on an annual basis.
As a result of slow demand for memory chips, cellphones, and home appliances, major brokerage firms have significantly reduced their profitability projection for the chipmaker’s fourth quarter. They forecasted that the company would bring in around 67 trillion won in revenue and approximately 6 trillion won in operational profit over the next quarter.
“The consumer electronics and visual display industries of Samsung are unable to see a rebound in demand, despite the fact that a number of noteworthy events, such as Black Friday and the World Cup, have taken place. It is anticipated that the company’s revenues from its mobile division would reach their lowest level ever this year “According to Lee Seung-woo, an analyst at Eugene Investment Securities,
The industry analyst anticipated that the chipmaker’s revenue and operating profit would fall by 8 percent and 44 percent, respectively, on an annual basis, to a total of 281 trillion won and 25.2 trillion won in the next year.