Samsung’s fourth-quarter profit fell 69%, hitting an 8-year low

Samsung Electronics has a big phone launch this week, but before that happens, let’s check out the company’s latest quarter. Following the trends of the industry as a whole, Samsung’s earnings seem to be a disaster.

In the fourth quarter of 2022, the company’s revenue – up to 70.5 trillion won ($57.3 billion), down 8% from the fourth quarter of 2021 – looks good. Profit in the fourth quarter fell 69% year on year to 4.3 trillion Korean won, or $3.5 billion. This is an eight-year low since the third quarter of 2014.

Samsung Electronics manufactures almost every electronic device and every part you find in one of those devices – phones, tablets, TVs, laptops, memory chips, SoCs, displays, camera sensors and batteries – so the company’s profits will always go where it goes. general economy.

“The business environment deteriorated significantly in the fourth quarter due to weak demand amid the global economic downturn,”Samsung said in a statement. “Memory division profits fell sharply as prices fell and customers continued to adjust inventory. The System LSI division [an Exynos division] also saw a decline in revenue as key product sales were held back by industry inventory adjustments.”

Memory aside, Samsung has also flagged smartphone demand as a declining business, a downturn that has affected both its own Galaxy phone division and its display division, which supplies displays for most smartphones.

It’s not all bad news for Samsung. Despite a crushing fourth quarter, the company managed to exit 2022 with record high revenue. The foundry business posted record fourth-quarter revenue, and TV sales surged.

Samsung’s press release also mentions the launch of the Galaxy S23 this Wednesday, but we’re not sure if that will help Samsung. According to rumors, this year, nothing much changes in the devices. The S23 lineup is almost identical to the S22, only with updated specifications.

Several reports say that Samsung is raising prices in some regions, which could make 2023 for Samsung even tougher. In one example from Spain, prices have risen by €100 ($108) across the board, with the base S23 starting at €959 ($1,042) and the S23 Ultra starting at €1,409 ($1,530). Phone division logic “Low profit? Rise prices!”may not help as smartphone sales are falling due to the economy and consumers holding phones longer than ever.

“In 2023, Samsung expects the effects of the economic downturn to continue for the time being,” the company said in a statement. “However, analysis of smartphone buying patterns suggests that demand will continue to polarize between premium and low-end phones.”