Due to low demand, Samsung’s profit margins fell 23 percent

Samsung has reported a record-breaking consolidated revenue of 76.78 billion Korean won (US$54 Billion) for the third quarter in 2022. But it has also Profitability declinedComparable to the previous quarter, and year-overyear. Operating profit of the tech giant (KRW 10.85 trillion, or US$7.6billion) fell 23 percent in the second quarter, and 31.4 percent in the same period last. Samsung’s operating profit was from July 2021 – September 2021KRW 15.82 billion, 26 percent higher than in the previous quarter. According to the company’s earnings report, its divisions are struggling with weak demand amid global economic instability. 

Its Memory business suffered from a weak consumer product demand and customers’ inventory adjustments, which caused it to lose money. The LSI business suffered from a weak demand for TVs and phones, but revenue from SoCs grew because of the increased use of 5G. Low demand and higher costs also affected Samsung’s Visual Display Business.

Last quarter, Samsung’s Mobile Experience (MX) business was its shining spot. It posted KRW 32.21 trillion in consolidated revenue (US$22.6billion) and KRW 3.24 trillion in operating profit (US$2.27billion) respectively, both of which were higher than the quarter before. The success of MX is attributed to the company’s sales of the Galaxy Z Fold 4And Z Flip 4Both showed greater growth than their predecessors. The Galaxy S22 series was also able to keep “solid sales momentum.” 

Because of year-end seasonality, the tech giant expects its smartphone and wearables business to perform better in fourth quarter. Samsung’s mobile business could continue to make solid profits next year as the smartphone and wearable market continues to grow. A third division that performed well was the Foundry business of Samsung, which saw record earnings (KRW 23.02 trillion, US$16 billion in revenue consolidated and KRW 5.12 trillion, US$3.6 billion operating profit), thanks to strong demand from global clients.

Samsung officially named Jay Y. Lee its executive chairman on the same day it released third quarter earnings. The move is symbolic, as Lee is already the company’s de facto leader. However, BloombergThe title may make it easier for Lee to work with companies around the globe in his efforts to grow Samsung’s biotechnology and semiconductor businesses. Lee was sentenced in 2017 to five years imprisonment for bribing officials. Received a presidential pardonIn August, he was able to help South Korea get out of the economic crisis.