Samsung Electronics forecast its operating profit for Q3 to plummet more than 30 per cent year-on-year and sales growth to slide due to falling demand for chips as the global economy slows.

The estimated operating profit of KRW10.8 trillion ($7.7 billion) compared with KRW15.8 trillion in Q3 2021. It tipped revenue to grow 2.9 per cent to KRW76 billion.

Samsung’s guidance is a significant shift from its Q2 results, when profit and revenue each grew.

It will release its full earnings later in the month.

Slowing demand for electronic devices and appliances is pushing up inventories of memory chips and causing prices to fall significantly.

Analysts expect memory chip prices to continue to decline, likely weighing on Samsung’s profit for the next few quarters.

Earlier this week, a Samsung executive reportedly outlined plans to maintain memory chip output despite the slowing demand, with the company also targeting a hike advanced silicon by 2027.