Samsung Unveiled Weak Profit in Q4 2022 amid Economic Woes

On Tuesday, Samsung Electronics announced that its profit in the fourth quarter of 2022 hit an eight-year low amid a global economic slowdown.

The South Korean tech giant recorded a 69.00% or $3.50 billion decline in operating profits. This latest data represents the lowest reading since the third quarter of 2014.

Besides, the revenue of Samsung also plummeted by 8.00% to $57.20 billion year-over-year.

Moreover, the entity’s profit from its bread-and-butter semiconductor business came to $219.00 won. This fresh data is considered well below the firm’s previous record of $7.10 billion in 2021.

This decline is attributed to a sharp decline in chip prices caused by weakened demand as clients adjusted their inventories amid recession woes.

In the first two years of the coronavirus pandemic, Samsung thrived amid its dual strengths in parts and finished products. Also, the tech giant benefited from robust demands for computers, television, and chip power computer servers as people were stuck at their homes.

Yet, the company is now having a hard time due to concerns about a global slowdown, easing of pandemic curbs, and geopolitical issues.

In particular, the ongoing war between Russia and Ukraine disrupted the supply chains. Besides, it left major economies struggling with soaring inflation and slower economic growth.

Memory Earnings of Samsung Dropped

Furthermore, the firm’s overall memory demand declined as customers continued to adjust their stockpiles amid deepening economic uncertainties.

Besides, memory chips plunged further, causing a substantial amount of inventory valuation loss. Samsung said it decreased significantly compared to the previous quarter.

For DRAM, server demand became limited as Set build plummeted amid clients’ current stance on inventory reduction.

Additionally, mobile and PC demand weakened due to major customers making continued stockpile adjustments and Set build reductions.

Hence, Samsung said that the impact of sluggish demand and low inventory is expected to continue in the first quarter.