Samsung Electronics’ inventory at an all-time high due to sluggish demand for semiconductors… 52 trillion won accumulated

Money Today Sejong = Reporter Choi Min-kyung | 2023.03.07 21:03

photo">(Seoul = News 1) Reporter Lim Se-young = Employees are coming and going in the lobby of Samsung Electronics’ Seocho office building in Seocho-gu, Seoul on the 31st, when Samsung Electronics’ fourth quarter and annual results of 2022 were announced. Samsung Electronics announced that operating profit based on consolidated financial statements in the fourth quarter of 2022 (October-December) decreased by 68.9% compared to the same period last year to 4.31 trillion won. During the same period, the operating profit of the semiconductor (DS) division fell by nearly 97% in one year. However, its annual sales last year were 302.23 trillion won, surpassing 300 trillion won in annual sales for the first time. Annual operating profit was 43.38 trillion won, down 15.99% from the previous year (51.6339 trillion won). 2023.1.31/News1 Copyright (C) News1. All rights reserved. Unauthorized copying and redistribution prohibited.

Due to sluggish demand for semiconductors, Samsung Electronics’ total inventory last year exceeded 50 trillion won for the first time ever.

According to the business report disclosed by Samsung Electronics on the 7th, the total inventory assets of Samsung Electronics as of the end of last year were 52.1879 trillion won. It increased by 26.1% compared to 41,384.4 billion won at the end of 2021. Last year was the first time that Samsung Electronics’ inventories exceeded 50 trillion won.

However, starting from the third quarter of last year, inventory levels have eased somewhat. Compared to the third quarter of last year (57.3198 trillion won), inventory decreased by more than 5 trillion won. Inventory turnover also improved from 3.8 at the end of the third quarter of last year to 4.1 at the end of the fourth quarter of last year. The higher the turnover ratio, the faster the turnover of inventory translates into sales.

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Since the second half of last year, it seems that the inventory situation has improved somewhat due to special measures such as lowering the factory utilization rate. The HHP production utilization rate, including mobile, fell from 72.2% in the third quarter of last year to 69.0% at the end of last year. The operating rate of video equipment such as TVs also fell from 75.4% to 75.0% during the same period. This is to adjust production according to market conditions.

However, in the semiconductor business (DS) sector, inventory is still piling up. As of the end of last year, inventory assets of Samsung Electronics’ DS division stood at 29.576 trillion won, up from 26.3652 trillion won in the third quarter of last year. Compared to the end of 2021, it soared by 76.6%.

In particular, as demand for memory, a flagship product, has sharply slowed, the inventory of unsold products (6.6011 trillion won) soared 165% compared to the previous year. As product prices continue to fall due to memory oversupply, inventory values ​​are also plummeting. Samsung Electronics’ inventory valuation loss on a separate basis at the end of last year was 2,529.4 billion won, 3.6 times higher than the 696.5 billion won during the same period last year.

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