Samsung Electronics’s Performance in 2022: Sales Exceed 300 Trillion Won for the First Time, But Company Saw an Earning Surprise in Semiconductors

Samsung Electronics Seocho Office

Samsung Electronics recorded a record-breaking 300 trillion won in annual revenue last year, but the company’s operating profit decreased from the previous year due to deteriorating performance in semiconductors. In particular, the company recorded an earnings surprise by only earning profits of 270 billion won from semiconductors in the fourth quarter last year.

According to the Fourth Quarter and FY 2022 Results released by Samsung Electronics on January 31, Samsung reported consolidated revenue of 302.23 trillion won last year, up 8% from the previous year. However, the company’s operating profits decreased 8.26% to 43.38 trillion won. Experts believe the company did well by maintaining growth in revenue despite weaker demand due to the global recession and the war in Ukraine.

But the company’s performance in the fourth quarter (Q4) alone was closer to an earnings surprise. In Q4, the company recorded consolidated revenues of 70.46 trillion won and operating profits of 4.31 trillion won. Revenue decreased 8.2% year-over-year (YoY), and operating profits also fell 6.55% YoY.

In particular, performance in Device Solutions (DS), which used to account for more than half of Samsung’s operating profits, deteriorated significantly in Q4. Device Solutions recorded revenues of 20.07 trillion won and operating profits of 270 billion won in Q4. The DS operating profits in Q4 accounted for only 6% of Samsung Electronics’s Q4 operating profits. This was the worst quarterly performance in Device Solutions, since the first quarter in 2009, when the sector recorded a deficit.

The performance in the memory business dropped drastically with customers continuing to adjust their inventory, bringing prices down. However, the foundry business achieved record-high quarterly and annual sales due to advanced node capacity expansion. The company saw profits increase from the previous year thanks to an increased portion from high-performance computing (HPC), the continuous evolution of mature processes and the diversification of its customer base.

The Device eXperience (DX) division including the Mobile eXperience (MX), TVs and home appliances recorded revenue of 42.71 trillion won and operating profits of 1.64 trillion won in Q4. Weak market demand and the burden of costs led to deteriorating profitability in the Digital Appliances business. Revenue and profit from the smartphone business (MX) both dropped due to poor sales and weak market demand in the mid-to-low-end segments.