Samsung Electronics posted 4.4 trillion won in valuation losses last year alone due to increased inventory assets

Reporter Paul Lee / approved : 2023-02-21 06:34:37
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This article is translated by AI company Flitto and Alhpa Biz neural machine translation technology
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[Alpha Biz=(Chicago) Reporter Paul Lee] Samsung Electronics' inventory assets hit an all-time high last year due to the global economic slowdown, with inventory valuation losses alone reaching 4.4 trillion won, the report showed.

According to a consolidated audit report submitted by Samsung Electronics on the 16th, Samsung Electronics' inventory asset valuation loss last year was KRW 4.4088 trillion. It is an increase of 154.0% from 1.7357 trillion won in the previous year (2021).

At the end of last year, Samsung Electronics' inventory is 52.1879 trillion won. It increased by 20.7% compared to the previous year (41.3844 trillion won).

Inventory assets refer to assets that can be confirmed through inventory surveys, such as products or products of a company. For example, if the price of inventory assets acquired at $3 falls to $2 at the end of the year, $1 becomes an inventory valuation loss.

Samsung Electronics is processing inventory valuation losses as sales costs. The larger the valuation loss of inventory assets, it adversely affects operating profit.

Due to the nature of manufacturing, it is difficult for the semiconductor industry to lower the utilization rate. In general, most of the time, the cost of stopping the line or reducing the utilization rate is judged to be a loss rather than accumulating inventory. Therefore, operators choose to lower the selling price and run out of inventory.

The industry predicts that the semiconductor industry will continue to deteriorate until the first half of this year. Market research firm TrendForce predicts that DRAM prices will fall 20% in the first quarter of this year and 11% in the second quarter. NAND flash prices are expected to fall 10% in the first quarter and 3% in the second quarter. 

 

As a result, Samsung Electronics' inventory valuation loss is also expected to expand. However, from the second half of the year, the decline is expected to ease as the inventory of memory semiconductors by customers is close to an appropriate level.

 

 

Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)

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