Quarterly revenue of KRW 70.46 trillion, operating profit at KRW 4.31 trillion Macroeconomic uncertainties expected to persist; anticipates demand to begin recovering in 2H
Quarterly revenue of KRW 70.46 trillion, operating profit at KRW 4.31 trillion
Macroeconomic uncertainties expected to persist; anticipates demand to begin recovering in 2H
Samsung Electronics today reported financial results for the fourth quarter and the fiscal year 2022.
The Company posted KRW 70.46 trillion in consolidated revenue and KRW 4.31 trillion in operating profit in the quarter ended December 31, 2022. For the full year, it reported 302.23 trillion in annual revenue, a record high and KRW 43.38 trillion in operating profit.
The business environment deteriorated significantly in the fourth quarter due to weak demand amid a global economic slowdown. Earnings at the Memory Business decreased sharply as prices fell and customers continued to adjust inventory. The System LSI Business also saw a decline in earnings as sales of key products were weighed down by inventory adjustments in the industry. The Foundry Business posted a new record for quarterly revenue while profit increased year-on-year on the back of advanced node capacity expansion as well as customer base and application area diversification.
Samsung Display Corporation (SDC) saw earnings in the mobile panel business decline as smartphone demand fell while the large panel business narrowed its losses as sales of QD-OLED for TVs increased and as the business’s LCD inventory was fully depleted.
Revenue and profit at the Mobile eXperience (MX) Business declined amid weak demand in the mid- to low-end segments while the Networks Business posted an increase in revenue led by domestic demand for 5G installations and expansion in overseas businesses.
The Visual Display Business posted higher revenue and operating profit as sales of premium products, including Neo QLED and Super Big TVs, increased, while the Digital Appliances Business saw a profit decline because of cost increase due to deteriorated market conditions and as competition intensified.
The strength in the US dollar against the Korean won resulted in a positive impact of approximately KRW 0.5 trillion company-wide on operating profit compared to the previous quarter.
The recent change in Korean tax law which revised taxation on dividends received from subsidiaries led to a decline in the Company’s corporate tax in the fourth quarter.
The one-time item due to the tax law change was reflected in the quarter’s financial statements and does not mean the Company received a corporate tax refund, nor is it related to the Company’s actual tax payment.
In the first quarter, the semiconductor business will focus on actively addressing the demand for high-end products, such as DDR5, LPDDR5x and 200 megapixel (MP) image sensors, amid a weak memory market and soft global IT demand. SDC plans to meet the demand for major customers’ new products.
The Company plans to expand its leadership in the premium smartphone segment with the launch of Galaxy S23 while the Networks Business will focus on the domestic and overseas businesses, including North America. The Digital Appliances Business will aim to boost sales in the premium segment through new models, such as the BESPOKE Infinite Line.
For 2023, while the macroeconomic uncertainties are expected to persist, the Company anticipates demand to begin recovering in the second half. The semiconductor business will continue to reinforce market and technology leadership and expand the proportion of advanced nodes and products, such as DDR5, LPDDR5x and Gate-All-Around (GAA) processes.
Earnings at SDC’s mobile panel business is expected to be robust, and the large panel business will focus on growing the QD-OLED business and improving profitability.
The Device eXperience (DX) Division plans to improve competitiveness by strengthening the premium product line-up, based on the Company’s technology leadership. The Division also plans to expand the SmartThings ecosystem through differentiated technologies and partnerships to provide customized, hyper-connected user experiences.
The Networks Business is expected to maintain revenue growth by actively responding to new market opportunities, particularly in overseas businesses, and by reinforcing technology leadership in 5G core chips and virtualized Radio Access Network (vRAN).
For the Digital Appliances Business, the Company will continue to provide hyper-connected user experiences based on SmartThings and enhance the competitiveness of premium products centered on BESPOKE models.
The Company’s capital expenditures in 2022 reached a total of KRW 53.1 trillion, including KRW 47.9 trillion for semiconductors and KRW 2.5 trillion for displays. In the fourth quarter, capital expenditures were KRW 20.2 trillion, with KRW 18.8 trillion in semiconductors and KRW 0.4 trillion in displays. Spending on memory was concentrated on investing in P3 and P4 infrastructure, in preparation for mid- to long-term bit supply and in EUV to enhance competitiveness. Foundry investments focused on expanding the production capacity of advanced nodes at Pyeongtaek as well as on the initial capacity for 3 nanometer (nm) and the infrastructure for the Taylor site.
