The demand for household appliances, smartphones, TVs and above all chips is booming.
(Photo: Reuters)
Tokyo The South Korean electronics group remains on record course thanks to the high demand for electronic products and especially memory chips. In the fourth quarter of 2021, revenue rose 24 percent year-on-year to 76.57 trillion won, a quarterly record, the company said on Thursday. Operating profit grew 4.8 percent to 13.87 trillion won.
Samsung also posted a new sales record for the full year at 279.6 trillion won. It was even 19 percent above the previous year. At 18.5, the profit margin was just below the group’s historical highs.
The growth drivers show that Samsung, like other electronics companies, is one of the winners of the corona crisis. In the fourth quarter, the group benefited primarily from increasing sales of its premium smartphones, including foldable phones, as well as televisions and household appliances. Operating profit declined compared to the previous quarter due to a special bonus payment to employees. But compared to the previous year, it increased, mainly because of the booming demand for semiconductors.
Semiconductor division the biggest winner
The semiconductor division currently accounts for the bulk of Samsung’s profits. As the world market leader in memory chips, Samsung is benefiting particularly from the fact that the lack of chips is driving up prices. However, the record result cannot cover slightly negative trends.
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The Koreans achieved a sales record for households. But profitability fell slightly as component costs rose with the global price surge. In addition, the booming semiconductor division of all things lost some of its momentum in the past quarter.
One reason was slightly falling prices. Production growth also fell short of Korean expectations. At the same time, high investments for Samsung’s expansion into the contract manufacturing of computer chips also made an impact.
But that’s complaining on a high level. The result for displays for mobile phones, monitors and televisions is really mixed. Samsung made more money than before on screens for smartphones. But a drop in the price of liquid crystal displays widened losses in larger displays.
The prospects of Korea’s largest corporation are characterized by great uncertainty. The group expects continued high demand in many business areas, especially in information technology and in the semiconductor area. Samsung plans to use its strong profits to increase production of advanced processes and invest in next-generation products and technologies. “However, it can be assumed that the challenges related to delivery problems and COVID-19 will continue to exist,” the group said.
More: In the boom in the chip industry, Samsung is overtaking the market leader Intel