Samsung reports Q4 operating profit down 69% YoY to ~$3.5B, its lowest since Q3 2014, and revenue down 8% YoY to ~$57.3B, citing weak chip and smartphone demand
Samsung enters the first half with sharply reduced operating earnings and revenue, while its chip and smartphone businesses are directly exposed to the weak demand it identified.
The final result validates Samsung’s preliminary Q4 outlook, leaving investors with a weaker earnings baseline than the prior year.
Second-order effects
The subsequent Q1 chip-division loss shows that the Q4 demand weakness translated into deeper pressure on Samsung’s semiconductor profitability, rather than a one-quarter earnings miss.
Samsung’s smartphone weakness removes a second earnings buffer during the chip downturn, concentrating the company’s near-term recovery on a rebound in end-market demand.
Third-order effects
Repeated profit declines in 2019 and 2023 point to Samsung’s earnings remaining highly cyclical because memory pricing and demand can deteriorate faster than the company’s broader revenue base adjusts.
If weak demand persists across chips and handsets, Samsung’s scale does not eliminate the need to manage through prolonged semiconductor downcycles; it chiefly determines how much of the cycle it absorbs.
The trend: Samsung’s results are one data point in the recurring semiconductor-demand cycle in which memory weakness and slower device sales compound pressure on diversified hardware groups.
Citing weak consumer demand should be the theme of 2023. https://twitter.com/...
@taimurasad
Taimur Asad on x
But Apple is doomed. https://twitter.com/...
@cherykang
Chery Kang on x
Chips are down Because @Samsung says it's continuing with capex investment in 2023 Samsung Elec -2.8% SK Hynix -4% Chipmakers in Taiwan, Japan all down too
@dnystedt
Dan Nystedt on x
9/ Samsung 2023 Capex Samsung said it will maintain 2023 capital spending at around the same level as 2022, including in memory chips due to the need to prepare for long term demand. $MU #Samsung
@dnystedt
Dan Nystedt on x
Samsung No. 1 Global Chip Maker in 2022 2022 Revenue https://1.samsung/ revenue US$76.62 billion 2.TSMC revenue +33.5% to US$75.88 billion https://3.intel/ revenue -20% to US$63.05 billion (Samsung US$ calculation my own. Details below) #Samsung $TSM $INTC
@realchetblong
Chet Long on x
They took a hit to their profit like they haven't seen in 8 years, and expect further contractions in the smartphone and chip markets going further into 2023. The fight to bring down inflation is necessary, but it isn't fun... and it isn't done. https://twitter.com/...
@skundojjala
Sravan Kundojjala on x
- 2023 CapEx will be roughly flat; comments indicate most of it will be spent on clean rooms, advanced nodes and EUV - Foundry utilization rates took a hit in 4Q and the trend will continue in 1Q23 - 2nd gen 3nm (3GAP) traction from mobile and HPC customers in 2024
@skundojjala
Sravan Kundojjala on x
Samsung 4Q22: - Memory revenue down for the 2nd straight quarter. Will decline once again in 1Q23. - Memory revenue down 20% q/q to $19.8b - A record quarter for logic (includes foundry) chip division; revenue up 2% q/q to $6.4b - 2022 CapEx up 10% to $35b $SSNLF
@mayhem4markets
@mayhem4markets on x
Oof, Samsung. Semiconductor earnings collapsed by 97% as the chip glut takes hold. Source: Bloomberg https://twitter.com/... https://twitter.com/...
@mayhem4markets
@mayhem4markets on x
Will chip production fall back toward its primary trend after such a significant surge? A lot of demand was pulled forward for the past several years. Now spending on computers by businesses and consumers is falling, as well as cloud spend. So continued softening seems likely. ht…
@realchetblong
Chet Long on x
🔻 The world's biggest maker of chips and smartphones, Samsung, just reported a 69% plunge in Q4 profit. If that doesn't spell recession, I'm not sure what does. 📉
@reuterstech
@reuterstech on x
Samsung to keep up chip investment, undeterred by 8-year-low profit https://www.reuters.com/... https://twitter.com/...