Samsung Electronics Co. plans to continue its investment in its research and development plans and is going to continue ahead with expansion plans for several of its businesses despite a decline in revenue for the fourth quarter of 2022 due to global macro and geopolitical issues.
During its quarterly
The company saw a sequential decline in gross profit of 6.9 trillion won “due to the impact of a significant price decline and an inventory valuation loss in Memory, coupled with weak sales of smartphones,” with gross profit for the period amounting to 21.8 trillion won.
Predicting a continuous weak market demand in the first quarter of 2023, Daniel Araujo from the MX Division said:
“In Q1, we expect demand across all smartphone segments to decrease Q-on-Q due to the continuing economic slowdown and other lingering factors contributing to macroeconomic instability.”
Samsung, despite the current economic downturn, stayed firm on its expansion plans:
“[The Network segment] will focus on expanding our domestic and overseas businesses, including North America, and address new opportunities,” said Shu.
Consumer and business demand for tech products fell sharply across the board in the second half of 2022, which led to significant profit declines at semiconductor companies that had seen a boom at the start of the pandemic. Prices for memory chips have fallen dramatically as a result of a huge stockpile imbalance that has harmed businesses' earnings, including Samsung's.
To position itself for mid to long-term demand, Samsung declared that it would maintain its capital expenditure plans for 2023 at levels similar to those from the previous year.
Operating profit for the October-December quarter fell by 96.9% from the same quarter last year to 270 billion won in Samsung's memory chips-driven semiconductor sector, the firm reported.
The South Korean giant aims to set up its R&D labs employing about 40,000 workers in India. The company has already invested a whopping
India is unarguably becoming “the world’s next factory,” with the tech giants uprooting their business from China and planting in India. The
Apple plans to move the majority of its production capacity to the southern part of India, aiming at employing 70,000 workers for manufacturing and assembling purposes over the next two years.
“This highlights an evolving trend where many companies, not just Apple, are concerned about the environment in China, and not just because of COVID. When we look at theft of intellectual property, that's of technology, cyber-attacks on companies inside China, and the onerous restrictions that apply from the Chinese government to data flows, there are several factors that are making China a much less attractive environment for manufacturers to be,”
said Stephen Ezell , director of global innovation policy at the Information Technology and Innovation Foundation (ITIF) in Washington.
Samsung Electronics considers the broader expansion economic plan as a harbinger of opportunities and a safety blanket to fall upon.
“The chip industry is the safety plate of the Korean economy... Our aggressive investment is a survival strategy in a sense that once we lose our competitiveness, it is almost impossible to make a comeback,”
With an increase in natural language processing and conversation-style AI systems, EVP Memory Global Sales and Marketing Jaejun Kim highlighted the need for “high-performance HBM that provides data directly to GPUs and AI accelerators as well as the high-density server DRAM, such as the 128 gigabytes and plus that would support the CPUs that process the AI learning data. ”
Kim also stated that the company plans to capture the increasing demand for AI services by developing high-performance, high-density memory products that can do large-scale computation.
Samsung expects the weakness to continue in the short term but expects demand to start to recover in the second half of the year.
The company noted worries about macro uncertainties, inflation, and high-interest rates ruling FY-2023, it aims at increasing the earnings by focusing on strengthening “technological leadership by introducing first- generation 2 nanometer GAA(Gate-All-Around) process,” securing additional demands for large display business, by transitioning to OLED, and long-term investment in infrastructure for its P4 manufacturing facility in multiple R&D capabilities.