Samsung's profits have fallen sharply: by about 85% year-on-year in 2023, with the semiconductor division losing the most.
Samsung Electronics (Samsung) is a leader in the electronics industry such as chips and mobile phones, and its performance has also received widespread attention. However, Samsung's fourth-quarter results for fiscal 2023 released some time ago were surprising, with operating profit for six consecutive months**, and operating profit for the whole year decreased by about 85% compared to the same period last year.
Samsung earned 67 trillion won (364.) in the last fiscal quarter of last year48), operating profit 28 trillion (152.)32), but earnings fell 35% in Q4.
Previous results showed that Samsung's revenue in the third quarter of this year was 19116 trillion won, compared to 258 in FY202316 trillion won, a decrease of 14 from the same period last year58%。Earnings for the first quarter of this year were 374 trillion won, while the total profit for fiscal 2023 is 654 trillion won, down 8492%。
Samsung's revenue and earnings fell by about 85% from the same period last year, which is undoubtedly a huge blow to Samsung and other electronics industries.
The screen of the Samsung Electronics product launch event.
Why is Samsung profitable**?
In fact, after digging deeper, it's easy to see that Samsung's decline in revenue is largely due to the continued downturn in memory chips. Due to the slow recovery of the consumer electronics market worldwide, the demand for memory chips has also declined significantly. Samsung's move not only has a significant impact on Samsung's operation, but also has a significant impact on its industrial chain.
In fact, Samsung's chip business suffered the most losses. In the first quarter of fiscal 2023 alone, South Korea lost 1269 trillion won. This situation shows that although Samsung has a high market share in the chip field and has a strong scientific and technological force, it is still difficult to resist the impact of the recession.
In addition, Samsung also predicted in October that the memory chip market will gradually recover in 2024. However, according to the earnings forecast announced some time ago, such expectations seem too optimistic. In fact, the growth pace of memory chips is much slower than expected, making Samsung's growth face many difficulties.
However, is this related to the decline of the memory chip market?
First of all, Samsung has been hit by the turbulent financial crisis around the world.
Worldwide uncertainties have led to a downturn in the consumer market. Especially in some consumer electronic devices such as smart** and televisions. Due to the decline in spending power, Samsung's profits have been hit hard.
Secondly, the intensification of market competition is also a reason that cannot be ignored.
Many of Samsung's competitors are constantly putting a lot of pressure on Samsung in areas such as technology development and product innovation. Especially in smartphones, tablets and other areas. In order to seize the market, various enterprises adopt strategies such as low-price competition, so that the profitability of enterprises continues to decline.
In addition, some problems of Samsung itself have played a large role in the reduction of its revenue.
For the past two years, Samsung has been faced with the challenge of product innovation and brand identity. These issues have created customer interest in and loyalty to Samsung's brand. Therefore, in order to turn the tide, Samsung must improve its research capabilities and develop new products that are more competitive.
In addition, Samsung also has to face a new test, that is, how to maintain a steady development in the face of an increasingly complex global situation.
From an international point of view, the international economic policy represented by protectionism and the embargo on science and technology has increasingly become an important reason for restricting China's economic development. In the process of supporting chocolate, important political factors can spoil chocolate, especially for other chocolates, which is a strong stimulus to chocolate.
Overall, Samsung's revenue and earnings fell by about 85%, mainly because of some external and internal problems. However, it also shows that the current semiconductor industry has not yet emerged from the recession. This also shows that in the current increasingly complex global situation, it is also a difficult task for enterprises to maintain a good and healthy development state.
Faced with declining revenue, what will Samsung do next? Wait and see.