Samsung has published a financial report based on the results of work in 2022. At the same time, the company managed to get a total revenue of $245.4 billion, which is a new record for it. But at the same time, the operating profit amounted to $35 billion, which is $6.9 billion less than the result of the previous year. The sharp decline in profit is mainly due to weak demand for chips and smartphones, the categories that are the company’s main sources of profit.
“The business environment significantly worsened in the fourth quarter due to weak demand amid the global economic downturn,” explained Samsung.
The company’s semiconductor business did not have a good year. It suffered from weak demand for chips as Samsung customers adjusted and reduced their inventories amid economic uncertainty. Chip prices also fell, likely due to excess unsold inventory. All these factors caused a decrease in the business profit at the end of the year.
In the fourth quarter of 2022, Samsung’s semiconductor business had consolidated revenue of $16.3 billion and only $219 million in operating profit. For comparison, in the fourth quarter of 2021, these figures were $21.6 billion and $7.35 billion, respectively.
Samsung is bracing for this downward trend in revenue and profit to continue over the next few months, although it expects demand for its semiconductors to pick up in the second half of the year.
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Similarly, demand for smartphones was weak in the fourth quarter of 2022. Sales of Samsung’s more affordable phones declined, and while flagship sales met market expectations, they were still lower than in previous quarters. The company expects mass smartphone demand to weaken further in 2023 “due to persisting macroeconomic conditions.” But the company is waiting for stable demand for premium devices. The presentation of the new flagship Galaxy S23 line is expected on February 1.
Source: Engadget
