Samsung Electronics inventory at record high due to sluggish semiconductor demand … 52 trillion won accumulated

March 7, 2023
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Money Today Sejong = Reporter Choi Min-kyung | 2023.03.07 21:03

(Seoul = News 1) Reporter Lim Se-young = Employees come and go in the lobby of the Seocho Samsung Electronics office building in Seocho-gu, Seoul on the 31st, when Samsung Electronics’ fourth quarter and 2022 annual results were announced. Samsung Electronics announced that operating profit based on consolidated financial statements in the fourth quarter of 2022 (October-December) fell 68.9% compared to the same period last year to 4.31 trillion won. During the same period, the operating profit of the semiconductor division (SD) fell by almost 97% in a year. However, its annual sales last year won 302.23 trillion, surpassing 300 trillion won in annual sales for the first time. The 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 is 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 at the end of last year was 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 Samsung Electronics’ inventory exceeded 50 trillion.

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

Since the second half of last year, it appears that the inventory situation has improved somewhat due to special measures such as reducing the utilization rate of the factory. The utilization rate of HHP production, 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 televisions 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 (Semiconductor) business sector, inventory is still piling up. At the end of last year, Samsung Electronics’ DS division’s inventory assets 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 increased by 76.6%.

In particular, as the demand for memory, which is a leading product, slowed down sharply, the inventory of unsold products (6.6011 trillion) increased by 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.