Samsung’s fourth-quarter profit drops due to poor chip and smartphone sales


Samsung saw its profit drop significantly in the fourth quarter due to poor memory chip sales and continued slowing growth in the smartphone market.

The South Korean tech giant said on Tuesday that it recorded 4.31 trillion won in operating income and 70.46 trillion won in revenue in the fourth quarter of 2022. Operating income fell 69 percent year-on-year. year-on-year, and revenue fell 8% year-on-year. stage = Stage.

Samsung’s chip business, or Device Solutions, its usual cash cow, contributed a meager 270 billion won to operating income __ basically barely broke even.

The company said it saw a significant drop in memory chip unit prices due to a loss in inventory valuation while customers also purchased fewer chips to adjust their own inventory.

Samsung isn’t the only memory chip maker feeling the brunt of these price cuts; Micron reported a net loss of $195 million in its latest fiscal quarter, and SK Hynix is ​​also expected to report an operating loss.

Meanwhile, Samsung’s consumer electronics business, or Device Experience Business, also underperformed, recording 1.64 trillion won in operating income.

As for the mobile business, the company said both revenue and profit fell due to slowing overall smartphone sales and weak demand for low- and mid-range smartphones.

But Samsung Display, Samsung’s display panel maker, has been productive, contributing 1.82 trillion won. The unit focuses on high-end smartphone products despite continued decline in market demand, Samsung said.

The South Korean tech giant doesn’t mention its customers directly, but high profits can come from its solid sales. Apple’s iPhone 14 series, which uses OLED screen panels produced by Samsung Display.

For the full year of 2022, despite low fourth-quarter earnings, Samsung still recorded revenue of 302.23 trillion won, up 8% from a year ago. Operating income was 43.38 trillion won, down 8% year-on-year, despite the global recession and the Russo-Ukrainian war.

For 2023, Samsung said that although macroeconomic uncertainties remain, consumer demand is expected to begin to recover in the second half of the year.

For chips, it will focus on cutting-edge buttons and products, while for smartphones, it is expected that demand will continue to differentiate between high-end and low-end smartphones, i.e. Demand for high-priced phones will continue.


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