The world's biggest smartphone maker said its operating
profit rose to KRW 13.87 trillion for the October-December period in 2021, up
from KRW nine trillion in the same
quarter the previous year.
Thanks to high memory chip prices and strong consumer
demand, Samsung had its highest annual sales of KRW 279.6 trillion in 2021, an
18 percent jump from a year earlier, the company said in a regulatory filing.
Samsung achieved "record sales thanks to competitive
products, despite continuing uncertainty," the tech giant said in a
statement, singling out solid demand for its premium smartphone lines.
While the COVID-19 pandemic has wreaked havoc on the global
economy, it has helped many tech companies boom.
Pandemic-driven working from home has boosted demand for
devices powered by Samsung's chips, as well as home appliances such as
televisions and washing machines.
The world's biggest memory chip maker, Samsung Electronics
has aggressively stepped up investment in its semiconductor business as the
world battles chip shortages that have hit everything from cars and home
appliances to smartphones and gaming consoles.
The global chip supply shortage is expected to persist well
into the new year, analysts have said.
Growing demand
"In the Memory Business, demand is expected to grow as
enterprises ramp up IT investments while the Company will expand supply of
high-performance products," Samsung said.
In November Samsung announced a new microchip factory in
Texas, a $17 billion investment. The
plant is expected to be operational by the end of 2024.
Samsung is also investing in the development of advanced
technologies such as artificial intelligence and robotics, as well as 5G and 6G
communications.
Park Sung-soon, an analyst at Cape Investment &
Securities, said that memory chip prices were likely to decline in the first
half of 2022.
"Samsung's profit is likely to dip for the January-June
period. But we also expect chip prices to turn around in the second half,
giving a boost to company profits," he said.
"We had forecast around a 10 percent fall in chip
prices in the first months of 2022 but it appears now that the decline scope
will be smaller with solid demands for PCs and improved supply chains."
Consumer demand for high-end products, such as foldable
phones, also helped to further boost profits around the holiday season.
Samsung said it expected the smartphone and premium
television market to grow in the third year of the pandemic, though it
anticipated sustained "uncertainties triggered by COVID 19 and supply and
logistics issues".
Operating profits generated from Samsung's semiconductor
business accounted for over 63.7 percent of the Q4 total, illustrating the
major role the division plays in the sprawling group.
Samsung's operating profit from the semiconductor division
stood at KRW 8.8 trillion for the October-December period.
Samsung Electronics is the flagship subsidiary of the giant
Samsung group, by far the largest of the family-controlled empires known as
chaebols that dominate business in South Korea.
The conglomerate's overall turnover is equivalent to around
one-fifth of South Korea's gross domestic product.
Samsung Electronics' record sales last year came as Lee
Jae-yong, the firm's vice-chairman and the de facto leader of the wider Samsung
conglomerate, returned to management on parole release from prison last August.
Lee had spent over half of a two and a half year sentence
for bribery, embezzlement and other offences in connection with a corruption
scandal that brought down ex-South Korean president Park Geun-hye before his
release.
His return to management has eased concerns over
decision-making at Samsung.
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