samsung: Samsung reports 53% jump in profit despite supply chain woes

Jan 27, 2022

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SEOUL: South Korean tech big Samsung Electronics mentioned Thursday its working revenue rose 53.3 p.c within the fourth quarter of 2021, as report gross sales helped overcome pandemic-induced provide chain challenges.
The world’s greatest smartphone maker mentioned its working revenue rose to 13.87 trillion gained ($11.55 billion) for the October-December interval in 2021, up from 9 trillion gained in the identical quarter the earlier 12 months.
Due to excessive reminiscence chip costs and powerful shopper demand, Samsung had its highest annual gross sales of 279.6 trillion gained in 2021, an 18 p.c bounce from a 12 months earlier, the corporate mentioned in a regulatory submitting.
Samsung achieved “report gross sales because of aggressive merchandise, regardless of persevering with uncertainty,” the tech big mentioned in a press release, singling out strong demand for its premium smartphone traces.
Whereas the Covid-19 pandemic has wreaked havoc on the worldwide economic system, it has helped many tech firms growth.
Pandemic-driven working from house has boosted demand for units powered by Samsung’s chips, in addition to house home equipment corresponding to televisions and washing machines.
The world’s greatest reminiscence chip maker, Samsung Electronics has aggressively stepped up funding in its semiconductor enterprise because the world battles chip shortages which have hit every part from automobiles and residential home equipment to smartphones and gaming consoles.
The worldwide chip provide scarcity is predicted to persist properly into the brand new 12 months, analysts have mentioned.
“Within the Reminiscence Enterprise, demand is predicted to develop as enterprises ramp up IT investments whereas the Firm will broaden provide of high-performance merchandise,” Samsung mentioned.
In November Samsung introduced a brand new microchip manufacturing unit in Texas, a $17 billion funding. The plant is predicted to be operational by the tip of 2024.
Samsung can be investing within the improvement of superior applied sciences corresponding to synthetic intelligence and robotics, in addition to 5G and 6G communications.
Park Sung-soon, an analyst at Cape Funding & Securities, mentioned that reminiscence chip costs had been prone to decline within the first half of 2022.
“Samsung’s revenue is prone to dip for the January-June interval. However we additionally count on chip costs to show round within the second half, giving a lift to firm income,” he mentioned.
“We had forecast round a ten p.c fall in chip costs within the first months of 2022 but it surely seems now that the decline scope might be smaller with strong calls for for PCs and improved provide chains.”
Client demand for high-end merchandise, corresponding to foldable telephones, additionally helped to additional increase income across the vacation season.
Samsung mentioned it anticipated the smartphone and premium tv market to develop within the third 12 months of the pandemic, although it anticipated sustained “uncertainties triggered by COVID 19 and provide and logistics points”.
Working income generated from Samsung’s semiconductor enterprise accounted for over 63.7 p.c of the This autumn complete, illustrating the key position the division performs within the sprawling group.
Samsung’s working revenue from the semiconductor division stood at 8.8 trillion gained for the October-December interval.
Samsung Electronics is the flagship subsidiary of the large Samsung group, by far the most important of the family-controlled empires generally known as chaebols that dominate enterprise in South Korea.
The conglomerate’s total turnover is equal to round one-fifth of South Korea’s gross home product.
Samsung Electronics’ report gross sales final 12 months got here as Lee Jae-yong, the agency’s vice-chairman and the de facto chief of the broader Samsung conglomerate, returned to administration on parole launch from jail final August.
Lee had spent over half of a two and a half 12 months sentence for bribery, embezzlement and different offences in reference to a corruption scandal that introduced down ex-South Korean president Park Geun-hye earlier than his launch.
His return to administration has eased issues over decision-making at Samsung.



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