Samsung on Thursday reported operating profit up 51% year-on-year, driven by strong smartphone sales and record quarterly profits from its chip division.
The South Korean tech giant said it recorded revenue of around 77.8 trillion won (58 billion euros) and 14.1 trillion won (or 10.5 billion euros) in profit from operations during the quarter, figures up 18% and 51%, respectively, over last year. Samsung owes much of that to its chip division, which contributed more than half of its total operating profit, thanks to favorable conditions in the memory market as chip prices fell less than expected.
The South Korean tech giant said demand for DRAM and NAND remained strong in the quarter, mostly in data centers. Although uncertainties related to the current shortage of components persist, the demand for memory chips for servers should remain relatively high until the end of the year, it is argued on the side of Samsung.
Welcome to the Galaxy S22 Ultra
Besides memory, its foundry business (manufacturing chips under contract) also recorded its highest revenue in the first quarter, Samsung’s top management said, although the company did not disclose the figures. specific profit figures for that business unit. According to the South Korean giant, this good run is likely to continue due to the shortage of global chip manufacturing capacity under contract.
Meanwhile, Samsung’s mobile division – called the MX and Networks business – was the second largest contributor to the tech giant’s operating profit. The launch of the Galaxy S22 series of smartphones in the last quarter has helped boost the company’s growth. As such, it highlights the good reception given to its stylus smartphone, the Galaxy S22 Ultra, by former customers of the Galaxy Note series. Sales of mid-tier 5G smartphones, tablets and wearables also contributed to the strong profit, Samsung management said.
Samsung Display, its display panel manufacturing subsidiary, also contributed to the rise in operating profit recorded this quarter by the South Korean technology giant. This subsidiary has surfed on the increase in demand for OLED panels in the high-end smartphone market thanks to the launches of its “home” devices as well as those of its competitor Apple.
However, Samsung’s consumer electronics business units, which sell televisions and home appliances, saw their operating profit fall year-on-year. The company noted that Russia’s invasion of Ukraine caused demand for TVs to plummet, while earnings last year benefited from pent-up demand caused by the Covid-19 pandemic.
Source: ZDNet.com