Electronics

According to Huacheng Import and Export Data Observation, Samsung Electronics disclosed preliminary verification data on the same day. According to the consolidated financial statements, the company's operating profit in the fourth quarter of last year was 4.31 trillion won (about 23.7 billion yuan), down 68.95% year-on-year to the lowest point in eight years. In addition, Samsung Electronics achieved an operating profit of 43.3766 trillion won in 2022, down 15.99% year on year.

"The profit of Samsung Electronics Semiconductor Division plummeted by 97%". According to Huacheng Import and Export Data Observation, as the price of storage semiconductor, the core product of Samsung Electronics, fell sharply, the operating profit of Samsung Electronics Semiconductor Industry in the fourth quarter of last year was only 270 billion won, down 97% from the fourth quarter of 2021.

Analysts believe that the reasons for the decline in performance include the decline in the price of storage semiconductors and the record high inventory of system semiconductors. It is speculated that Samsung may join other storage chip companies including SK Hynix and Micron Technology in reducing production to cope with the price drop and oversupply.

According to the Huacheng Import and Export Data Observation, the price of memory chips has dropped sharply in the past year, and it is expected that the trend of decline will continue in the first half of 2023, which will undoubtedly make matters worse for chip companies that have laid off jobs and reduced production.

Industry analysts predict that in addition to Samsung, SK Hynix, a memory chip manufacturer, will also lose 812 billion won in the fourth quarter. According to the observation report of Huacheng Import and Export Data, the storage chips with high degree of commercialization and sensitive to changes in market supply and demand are the wind vane of the semiconductor industry. At present, the chip enterprises are carrying a large amount of inventory, and the market demand continues to be weak. Many chip companies, including Intel, Micron Technology and Western Digital, said after releasing their revenue loss reports that they would cut production capacity, reduce jobs and expenses to solve the increasingly serious problem of oversupply and high costs.

Due to the strong demand for scientific and technological products in the market, the price of memory chips soared to a high level at the beginning of 2020, and began to fall from the end of 2021. In the second half of 2022, affected by the global economic downturn, geopolitical conflicts and other factors, the decline of chip prices further expanded quarter-on-quarter. Analysts believe that in the second half of 2023, the decline of chip prices may narrow or stabilize, but due to the continued downturn in demand, the price of memory chips is expected to remain low throughout 2023.

David Su, senior credit analyst at S&P Global Rating, said that thanks to the optimization of China's epidemic prevention and control measures, the global demand for science and technology will further recover in late 2023, which may increase consumer spending on smart phones and other products, Huacheng Import and Export Data Watch reported.