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(courtesy of Samsung)

Samsung Electronics’ semiconductor division only reported 20.07 trillion won in consolidated revenue in the fourth quarter of 2022, down 24% year over year, giving up the No. 1 position in the world to Taiwan-based TSMC for the second quarter in a row.

The division posted an earnings shock with operating profits of 270 billion won (US$219 million) in a whopping 97% decline. But Samsung intends to maintain the scale of facility investment this year to secure a competitive edge.

Samsung posted its latest earning numbers on Tuesday. The last time the semiconductor division’s quarterly operating profits were below 1 trillion won was in the first quarter of 2012 (762 billion won). A company spokesperson said the disappointing profits were due to the falling price of memory semiconductors amid a deteriorating semiconductor market.

TSMC’s semiconductor division outsold its Korean rival for two quarters in a row last year, with sales of 25.1 trillion won (613.1 billion Taiwanese dollars) in the third quarter and 25.6 trillion won in the fourth quarter. The division posted operating profits of 13.3 trillion won in the fourth quarter, which was also much higher than Samsung Electronics.

Samsung Electronics’ company-wide revenue in the fourth quarter amounted to 70.46 trillion won on a consolidated basis. The company’s operating profits for the quarter were at 4.31 trillion won, which was 68.95% less than the same quarter last year.

This was the first time in eight years that Samsung’s quarterly operating profits dropped below 5 trillion won.

On a yearly basis, the company’s sales increased 8.09% year over year to 302.23 trillion won, but operating profit declined 15.99% to 43.38 trillion won.

In a company briefing on Tuesday, Samsung Electronics said it would continue medium- and long-term investment to prepare for future memory demand and reinforce its technological leadership — with the ultimate goal of becoming more competitive in memory semiconductors and boosting performance in the foundry sector.

Samsung also said its capital expenditure this year would be on a similar level to last year.

By Kim Hoe-seung, senior staff writer; Lee Jeong-hun, staff reporter

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