2018 is shaping up to be a pivotal year for the South Korean electronics giant. The company will likely release new flagship smartphones, expand its lineup by adding smartwatches and IoT devices, and introduce more compelling VR headsets than ever before.
The “galaxy a” is Samsung’s newest smartphone. It features a 5.8-inch screen and the latest Android 8 Oreo operating system.
SEOUL— Samsung Electronics Co. finished off a year in which it overtook Intel Corp. to become the world’s largest chipmaker by reporting its highest-ever quarterly sales.
The semiconductor sector profited from a supply shortage caused by the epidemic, which disrupted manufacturing of everything from automobiles to refrigerators to cellphones. Throughout the last year, demand outstripped supply, giving chipmakers like Samsung and Intel more pricing leverage.
The fourth-quarter earnings of the South Korean IT business reflect the better times. The company’s net profit increased by 64% to 10.84 trillion won, or approximately $9 billion, compared to 6.6 trillion won a year before. The semiconductor segment of the company was the driving force.
The business, which is based in Suwon, announced record revenues of 76.57 trillion won for the quarter ending Dec. 31. This is down from 61.6 trillion won a year ago.
Samsung’s performance slightly topped market expectations. Analysts polled by S&P Global Market Intelligence on average expected 10.7 trillion won in net profit and 75.5 trillion won in sales.
As a major electronics manufacturer and component supplier to firms like Apple Inc. and Sony Group Corp., Samsung, the world’s biggest producer of smartphones and TVs, is considered a tech industry bellwether.
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Samsung’s net profit increased by 51% to 39.9 trillion won for the whole year, while sales increased by 18% to 279.6 trillion won.
Samsung’s rise to the top of the revenue rankings comes as the semiconductor sector ramps up investment to produce more sophisticated chips and increase capacity. Intel, which makes microprocessor chips for PCs and servers, has dominated the market for over three decades, only losing ground to Samsung in 2017 and 2018 when memory-chip costs rose.
Last year, though, was especially fruitful for Samsung’s memory chip division, which has seen prices rise and is more widely used in the digital world than Intel’s microprocessors. The semiconductor sales of the South Korean company for 2021 increased by 29% year on year to 94.16 trillion won ($78.4 billion).
According to Gartner Inc., a tech market analyst, this was enough to drive Samsung to the top of the semiconductor business in terms of sales.
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Samsung’s strong success follows a massive reorganization among South Korea’s biggest tech firm. The firm removed all three of its co-CEOs last month and combined two business divisions, the mobile and consumer appliances businesses, into one. The moves, according to the corporation, were taken to assist it enter the next phase of development and increase its business competitiveness.
Memory demand is projected to remain robust this year, driven by data-center servers and 5G phones, according to Samsung. However, owing to manufacturing difficulties caused by component shortages and supply-chain concerns, customer interest may be stifled.
In addition, the corporation has increased its investment in contract chip manufacturing, including a new $17 billion plant in Texas. On Thursday’s results call, Kang Moon-soo, executive vice president of Samsung’s foundry business, predicted that chip supply will remain tight this year.
Samsung’s mobile business sector had a successful quarter, thanks in part to the robust launch of its premium foldable phones, the Galaxy Z Fold 3 and Galaxy Z Flip 3, in August.
The company’s mobile segment made 2.66 trillion won in operating profit in the fourth quarter, up 10% from the previous year, while sales grew 30% to 28.95 trillion won. However, owing to an increase in marketing expenditures, operational profit fell on a quarterly basis. Overall phone manufacturing is being hampered by component shortages.
The Galaxy S22, Samsung’s newest top smartphone, will be unveiled on February 9th. The phone is scheduled to be released in three different variants.
Jiyoung Sohn can be reached at [email protected]
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