Samsung’s income plunged in 2022 as a result of weak chip and smartphone demand
Samsung has revealed a pointy decline in revenue for 2022, primarily as a result of weak demand for its chips and smartphones, that are the corporate’s major moneymakers. The Korean tech large has posted KRW 302.23 trillion (US$245.4 billion) in annual income, which is a brand new file excessive for the corporate, in its newest earnings report. However it has additionally reported an working revenue of KRW 43.38 trillion (US$35 billion) for all of 2022, down KRW 8.5 trillion (US$6.9 billion) from the year before.
“The enterprise surroundings deteriorated considerably within the fourth quarter as a result of weak demand amid a worldwide financial slowdown,” the corporate defined. Whereas the tech large’s Foundry enterprise posted a rise in revenue as a result of buyer and utility diversification, its semiconductor enterprise carried out poorly as a complete. There was weak demand for its chips general, as clients regulate and scale back their stock within the face of financial uncertainties. Its chips’ costs additionally dropped, principally possible as a result of a surplus in unsold stock, contributing to the enterprise’ decline in earnings for the yr.
Within the fourth quarter of 2022, Samsung’s semiconductor enterprise earned KRW 20.07 trillion (US$16.3 billion) in consolidated income however solely KRW 0.27 trillion (US$219 million) in working revenue. For comparability, it posted a consolidated income of KRW 26.01 trillion (US$21.6 billion in early 2022’s conversion charges) and an working revenue of KRW 8.84 trillion (US$7.35 billion) for This fall 2021. Samsung is bracing for this downward development to persist all through the following few months, although it expects demand for its semiconductors to select up within the second half of the yr.
Equally, the demand for smartphones remained weak within the fourth quarter of 2022. Gross sales for Samsung’s extra inexpensive telephones went down, and whereas flagship gross sales held as much as market expectations, they’re nonetheless decrease than earlier quarters’. The corporate expects demand for mass market smartphones to weaken even additional in 2023 “as a result of persistent macroeconomic circumstances.” However because it additionally expects demand for premium gadgets to remain strong, it vows to strengthen “the competitiveness of its premium flagship merchandise.” To notice, Samsung will hold its first Unpacked event of 2023 on February 1st the place it should most definitely unveil its subsequent flagship cellphone, the Galaxy S23.