Samsung Electronics, last year’s sales of 279 trillion won ‘highest level’… Semiconductor boom and foldable supergap

51 trillion won in operating profit… 43% increase from the previous year

Samsung Electronics Seocho office building. [출처=연합뉴스]

Samsung Electronics announced on the 27th that it recorded 279.6 trillion won in sales and 51.63 trillion won in operating profit in 2021. Thanks to the boom in semiconductors, sales and operating profit rose by 17% and 43% compared to the previous year.

Despite continued uncertainty, Samsung Electronics achieved record sales based on differentiated products and technological competitiveness. All four quarters of 2021 recorded the highest sales in the same quarter, and also broke record sales on an annual basis.

Sales in the fourth quarter were KRW 76.57 trillion, up 3.5% from the previous quarter and 24.4% from the same period of the previous year, centered on set businesses, such as sales expansion of premium smartphones such as foldable phones and strong sales of TV and home appliances during the year-end peak season. Operating profit was 13.87 trillion won and operating profit margin was 18.1%. Operating profit decreased by 1.95 trillion won from the previous quarter due to a decrease in memory prices and an increase in smartphone marketing expenses at the end of the year, amid a special incentive payment. Compared to the same period last year, both operating profit and operating profit margin improved significantly, mainly in semiconductors.

Semiconductors recorded sales of 26.01 trillion won and operating profit of 8.84 trillion won in the fourth quarter. Memory sales declined slightly QoQ due to a slight drop in average selling price (ASP) while refraining from excessive sales expansion in consideration of the future market conditions and inventory level. Compared to the same period of the previous year, the company’s performance improved significantly thanks to the expansion of advanced processes and an increase in ASP. The foundry achieved the highest quarterly sales thanks to the overall supply expansion, but profitability declined slightly QoQ due to the increase in advanced process costs. Compared to the same period of the previous year, earnings improved thanks to the operation of the Pyeongtaek S5 line and the effect of price adjustments.

Samsung Electronics also put all its efforts into converting non-memory (system) semiconductors, which are represented by foundries (semiconductor consignment production). Last year, a large-scale investment plan worth 171 trillion won was announced and the location of the second foundry plant to be completed in the United States was also confirmed. Thanks to semiconductors, Samsung Electronics overtook Intel in the US and regained the top spot in sales for the first time in three years. Earlier, market research firm Gartner revealed that Samsung Electronics’ semiconductor sales last year were $75.95 billion (about 90.3 trillion won), which is more than $2 billion different from Intel, which recorded $73.1 billion (about 87.2 trillion won). Said to be number one.

The IM (IT & Mobile Communications) division recorded sales of KRW 28.95 trillion and operating profit of KRW 2.66 trillion in the fourth quarter. In the mobile sector, it is estimated that the foldable phone game made up for the slump in the first half, boosting earnings. MX (Mobile eXperience) sales increased slightly thanks to the expansion of sales of premium smartphones such as foldable phones and solid sales of Galaxy Device ecosystem products such as PCs, tablets, and wearables. Operating profit decreased QoQ due to year-end marketing expenses increase, but increased YoY. Network performance improved QoQ thanks to growth in domestic and overseas business sales.

Samsung Electronics launched the Galaxy Z Fold 3 and Galaxy Z Flip 3, the third-generation Galaxy foldable phones in August last year. In 39 days after launch, domestic sales exceeded 1 million units, which is the third fastest selling speed among Samsung Electronics smartphones after the Galaxy Note 10 and Galaxy S8. Not only in Korea, but also in the United States, it surpassed the sales volume of the second-generation foldable phone from January to July this year only with advance reservations, and also recorded a ‘best-in-class’ box office hit overseas, with reservations exceeding 1 million units in China.

The CE (Consumer Electronics) division recorded sales of KRW 15.35 trillion and operating profit of KRW 0.7 trillion in the fourth quarter. Although it achieved the highest quarterly sales ever thanks to strong sales of premium products during the year-end peak season, profits slightly decreased QoQ due to increased logistics costs.

Display recorded KRW 9.06 trillion in sales and KRW 1.32 trillion in operating profit in the fourth quarter. In the small and medium-sized panel, earnings grew QoQ on the back of strong demand for new smartphone products from major customers and increased sales of new applications. In the large-size panel, the deficit widened significantly due to the decline in LCD prices and the impact of the initial cost of QD display.

Facility investment last year was 48.2 trillion won, and by business, semiconductors were 43.6 trillion won and display 2.6 trillion won.

For memory, facility investment was carried out centered on the expansion of facilities in Pyeongtaek and Xian to respond to the demand for advanced processes such as EUV-based 15-nm DRAM and V6 NAND, process conversion, and investment in infrastructure for the P3 line in Pyeongtaek. Memory investment increased compared to the previous year as the application of next-generation technologies, including EUV, was preemptively expanded. The foundry investment was focused on the expansion of the Pyeongtaek EUV 5-nano advanced process.

The display investment focused on small and medium-sized modules and QD displays.

[위키리크스한국=최종원 기자]

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