Due to Sluggish Demand
Samsung Electronics’ and LG Electronics’ inventory assets increased in the third quarter. This is because they increased raw material procurement in order to reduce supply chain risks, and the global demand for their products is not recovering amid the ongoing recession.
Those of Samsung Electronics totaled more than 57 trillion won in the third quarter with a year-on-year increase of 51.6 percent. Its inventory assets have continued to increase since the outbreak of COVID-19. Specifically, the figure was approximately 6.9 trillion won in Q3, 2019, 5.8 trillion won in Q4, 2019, 32 trillion won in Q4 2020, and 41 trillion won in Q4, 2021.
In the third quarter, the inventory assets of LG Electronics increased 12.5 percent year on year to 11.2 trillion won. Those of this company were less than 5.9 trillion won at the end of 2019 but increased to 7.4 trillion won and 9.7 trillion won at the ends of 2020 and 2021, respectively.
When it comes to inventory turnover, Samsung Electronics’ fell from 4.6 to 3.8 and LG Electronics’ fell from 6.1 to 5.8, which means their products were sold less in the third quarter of this year compared to the same period of last year.