Happy New Year Bob!
I'm certainly very happy with my lowest priced (smallest form factor) Galaxy S22 phone and can't see why anyone would trust a "foldable phone" to not have screen degradation and other issues from extra moving parts... at a much higher price...
Samsung issues profit warning due to unexpected business slump
Judy Lin, DIGITIMES Asia, Taipei
Friday 6 January 2023
Samsung Electronics issued a preliminary earnings statement on January 6 saying that its 4Q22 operating profit fell by 69% to KRW4.3 trillion (US$3.4 billion), hitting an 8-year low. The company was originally scheduled to announce its 4Q22 earnings on January 26.
Samsung said in the statement that the decline in memory business in Q4 was greater than expected as customers' inventory correction effort to further tighten finances.
Its high-end foldable phones did not sell well either, according to analysts quoted by Reuters. This is largely due to weak demand resulting from prolonged macroeconomic issues, Samsung said.
Samsung received a double whammy from a memory chip price plunge and weakening demand for consumer electronic devices. The pandemic resurgence in China and PC makers' inventory problem also played a role in the lackluster market demand for Samsung.
Chip sales in South Korea fell 29% from the previous year in December, in the fifth consecutive monthly decline, following the biggest year-on-year decrease since 2009 in November, according to Bloomberg.
China accounts for some 60% of the semiconductor exports of South Korea in 2021, while memory chips contribute 25% of Samsung's revenues and 95% to that of SK Hynix.
Supply chain sources said Samsung raised contract prices of its NAND Flash chips by 10% in early December. That probably didn't help Samsung to compete with competitors such as Micron Technology and SK Hynix. It was reportedly planning a price slash in 2023.
Supply chain experts expect the downcycle of the tech industries to hit bottom in 2Q23, and inventory correction will be the most "painful" in 1Q23. Samsung's chip business has already been struggling to remain profitable in 4Q22, according to supply chain sources.
Although competitors such as TSMC, Micron, SK Hynix, and Intel have announced cuts either in outputs or in capital expenditures in the face of the market demand slump, Samsung has been reluctant to follow suit.
Bloomberg quoted a Citigroup analyst as saying that Samsung is likely to modify its 2023 capex strategy and refrain from a capex increase due to the bigger-than-expected price declines in memory prices.
digitimes.com |
