Samsung Electronics’ net profit in the first quarter increased by 46%, thanks to the development of its electronic products and equipment, which alleviated the financial blow caused by the temporary shutdown of US semiconductor production.
The world’s largest manufacturer of smartphones and memory chips reported a net profit of 7.14 trillion won, or about 6.4 billion U.S. dollars, higher than last year’s 4.88 trillion won. As of March 31, revenue in the first three months increased by 18% to 65.4 trillion won.
Samsung is an agent of the global technology community, producing various electronic products, and is also a component supplier to its biggest competitor.
In recent years, the company based in Suwon, South Korea has made profits through the chip industry. But due to bad weather, Samsung’s Texas semiconductor production has been suspended for several weeks this year. Chip’s operating profit fell 16% to 3.37 trillion won.
According to analyst estimates collected by S&P Global Market Intelligence, the strength of Samsung’s mobile and consumer electronics businesses has helped drive a net profit exceeding market expectations, reaching 6.5 trillion won and revenue exceeding 63.4 trillion won. .
The operating profit of Samsung’s mobile division soared by 65% to a total of US$4.39 trillion. Thanks to the Galaxy S21 flagship mobile phone, the mobile phone went on the market about a month earlier than normal plans. This is the first time the company’s mobile division’s operating profit surpassed semiconductors in the past five years.
The weakening of some major competitors is also part of the reason. China’s Huawei Technologies Co. Ltd. has been hit, and LG Electronics recently announced its withdrawal from the mobile phone industry.
Samsung’s consumer electronics business more than doubled its operating profit to 1.12 trillion won. But the company warned that as more countries gain population immunity and shift from home entertainment to outdoor activities, demand for TV may decline in the second half of the year.
As people spend more time and money online, large technology companies are booming, and chip manufacturers have been special beneficiaries during the epidemic. South Korean semiconductor giant SK Hynix (SK Hynix Inc.) said on Wednesday that its net profit in the first quarter increased by 53% from the same period last year.
Samsung predicted in its earnings release statement on Thursday that semiconductor profits this quarter will increase substantially. In the context of global chip shortages, Samsung said that as the global economy rebounds, semiconductor demand will remain strong.
Samsung is the largest memory chip manufacturer, and the prices of the two main memory chips are expected to rise this spring. Sanjeev Rana, a CLSA senior analyst in Seoul, said that in the first few months of the year, the price of NAND flash memory should rise, and the price of DRAM, which improves the multitasking capabilities of devices, will rise by 15% to 20%.