JAKARTA - As a result of customers buying fewer phones and laptops amid the continued global economic downturn, as well as rising costs, Samsung's quarterly revenue fell to its lowest level for eight years.
The South Korean-based tech giant published revenue reports in the fourth quarter (Q4) of 2022, where they generated around US$57.21 billion equivalent to Rp851 trillion in the quarter ending December 31, 2022, down 8 percent compared to last year.
Meanwhile, the company's operating profit is around USD 3.5 billion, equivalent to IDR 5.2 trillion, which is a 69 percent decrease compared to Q4 2021.
That figure marks the company's weakest quarterly profit since Q3 2014, when its smartphone business lost to competitors like Apple.
"The business environment deteriorated significantly in the fourth quarter due to weak demand amid the global economic slowdown," Samsung said in a statement, quoted by CNN International, Thursday, February 2.
Despite the ban, grim results have been anticipated. Samsung has marked a sluggish performance in pre-income forecasts earlier this month, with analysts citing a drop in memory chip prices and fewer consumer device orders.
Samsung's chip division, Samsung DS, which usually makes the biggest contribution to the company's revenue, is experiencing a disappointing quarter.
During the COVID-19 pandemic, companies sold record-breaking semiconductor chips such as DRAM and NAND storage. These chips are used on smartphones, tablets, laptops, PCs, game consoles, wearable devices, TVs and even servers.
However, due to high inflation, rising interest rates, ongoing economic recession, and geopolitical tension, demand for consumer electronic devices has fallen sharply.
The company began to cut costs, resulting in lower chip sales and low chip prices. Therefore, Samsung DS' Q4 2022 operating revenue is only about $219 million, which is considered to have barely reached a break in the semiconductor business.
In a presentation to investors, Samsung confirmed weak mobile and PC demand, its memory chip business also suffered as customers continued to adjust their inventory amid deepening uncertainty.
Samsung estimates some of these problems will continue in the coming months due to global economic uncertainty, but the company is already anticipating a overall demand for a recovery in the second half of this year.
The demand for smartphones is also likely to fall again this quarter compared to the same period last year, due to the economic slowdown in key territory.
However, there are some bright spots. Samsung said it earned revenue of USD 245.7 billion (IDR 3,659 trillion) for the full year in 2022, up from USD 227.4 billion in 2021, and a record high.
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