(Seoul) South Korean giant Samsung Electronics on Thursday reported a 58.57% jump in net profit in the first quarter of 2022 year on year, driven by strong demand for memory chips and buoyant smartphone sales. .
Posted at 10:59 p.m.
Net profit for the world’s largest smartphone maker reached 11.32 trillion won (US$8.9 billion) in the January-March period, the group said in a regulatory announcement.
The technology sector is suffering from a shortage of components used in the manufacture of chips, linked to the boom in global demand for electronic products and difficulties in supply chains caused by the coronavirus pandemic.
But analysts believe that this context has benefited the world’s largest chipmaker.
Their prices soared last year amid strong demand for chips used in consumer devices and data centers, enabling the South Korean giant to achieve record annual sales.
Investments in semiconductors
Samsung’s performance “continues to be driven by the semiconductor segment, supported by demand for memory chips – Dr AM and NAND – data centers, “commented to AFP the vice-president of the rating agency Moody’s, Gloria Tsue.
She added that disruptions at a competing factory of NAND Flash memory chips (used in particular in smart phones, USB keys, industrial and medical equipment, Editor’s note) belonging to the American company Western Digital and the Japanese company Kioxia, had benefited Samsung “due to the reduction in supply on the market”.
Samsung Electronics’ operating income jumped 50.5 percent to 14.12 trillion won, while revenue rose 18.95 percent to 77.78 trillion won.
Samsung Electronics claimed to have “recorded record consolidated revenue for the third consecutive quarter”.
The group’s shares were down 0.77% on Thursday at the opening of the Seoul Stock Exchange.
Samsung has markedly increased its investments in the semiconductor industry, whose worldwide shortage affects many sectors such as the automobile, household equipment, mobile telephony and video game consoles.
In November, he announced plans to build a $17 billion microchip production line in Taylor, Texas. The new plant is to be operational by the end of 2024.
The giant is also working to develop in advanced technologies such as artificial intelligence, robotics and 5G/6G communications.
Success of the Galaxy S22
Samsung Electronics said its memory business “reached record quarterly server sales amid strong demand.”
In the mobile branch, the new flagship model, the Galaxy S22, saw a 60% increase in sales compared to the S21, during its first three weeks of launch in the United States, according to Counterpoint research.
“The strong sales of the Galaxy S22 series since its launch in the first quarter contributed to the revenue growth, as the Galaxy S22 Ultra with S-Pen garnered positive feedback from current Galaxy Note customers,” Samsung said in a statement.
More than half of Galaxy S22s sold in the first quarter were S22 Ultra, the flagship product released after the Galaxy Note was discontinued, Counterpoint researcher Sujeong Lim told AFP.
“Galaxy Note is a series of models to which customers are most loyal, and S22 Ultra has been able to meet the expectation demand of these customers,” said M.me Lim.
“The price freeze, the COVID-19 recovery and the fact that this is the first Galaxy smartphone with a 4nm processor have won customers over.”
However, the company faces many challenges, analysts said.
Samsung’s “good semiconductor performance is largely a consequence of external factors” like the pandemic, Ms.me Lim to AFP.
“Given inflation, rising interest rates, and shifts in consumer habits post-COVID-19, it’s hard to bet that growth in demand for Dr AM will continue next year”.
“But despite other major risks in the macroeconomic environment — Russia’s invasion of Ukraine and Shanghai’s COVID-19 lockdown — Mme Tsuen said his credit profile should “remain very strong”.
Samsung Electronics is the flagship subsidiary of giant Samsung Group, by far the largest of the family empires, known as the chaebols, that dominate business in South Korea.
The conglomerate’s turnover is equivalent to about one-fifth of South Korea’s Gross Domestic Product.