By Joyce Lee and Heekyong Yang

SEOUL (Reuters) – Samsung Electronics (OTC:) Co Ltd reported a 31% drop in third-quarter revenue on Thursday and stated geopolitical uncertainties had been anticipated to dampen demand by early 2023 because the financial slowdown world has diminished the urge for food for digital gadgets.

The world’s largest reminiscence chip and smartphone maker stated that regardless of headwinds within the international economic system, demand for its semiconductors might choose up later subsequent yr as new knowledge facilities and computer systems require extra of reminiscence.

Samsung’s (KS:) working revenue fell to 10.85 trillion gained ($7.7 billion) for the July-September quarter from 15.8 trillion gained a yr earlier, the primary year-on-year decline in nearly three years.

That matched Samsung’s personal estimate of 10.8 trillion gained earlier this month. Income rose 4% to 76.8 trillion gained.

Revenue from its chip enterprise fell to five.12 trillion gained from 10.07 trillion gained a yr earlier.

That was comparatively extra optimistic than smaller rival SK Hynix, which warned of an “unprecedented deterioration” in demand for reminiscence chips and reduce funding by greater than 50% on Wednesday.

Though Samsung’s fourth-quarter earnings are anticipated to say no additional as reminiscence chip costs proceed to fall, Samsung will probably be higher in a position to defend its earnings than its friends on account of economies of scale, analysts stated.

Samsung is anticipated to maintain capex to a minimal in 2023 in comparison with 2022 – at round 5% for reminiscence chips – to proceed its migration to extra superior manufacturing, which can initially scale back the provision of some chips on account of ‘a brand new manufacturing course of,’ stated Daishin Securities. analyst Wi Min-bok.

This differs from the plan of rivals SK Hynix or Micron Know-how (NASDAQ:) to doubtlessly reduce investments by greater than 30% subsequent yr.

($1 = 1,416.8000 gained)