Chip business to recover in 2nd quarter
Samsung Electronics marked 65.39 trillion won in revenue and 9.38 trillion won in operating profit in the first quarter this year.
Revenue was the highest ever for a first quarter, Samsung said. Operating income rose 45% year-on-year.
The South Korean tech conglomerate saw its mobile and consumer electronics businesses record strong performances, which offset weakened earnings of its chip unit.
The semiconductor business posted 3.37 trillion won in operating profit. Demand for memory chips from mobile and notebook PCs were solid, Samsung said.
But cost to transfer production lines to the latest advanced process and drop in prices of NAND caused profitability to drop.
Its foundry business saw earnings drop due to the halt of its plant in Austin, Texas. The plant will fully normalize in the second quarter, while the foundry line in Pyeongtaek will also begin production, which will strengthen the company’s leadership in the sector, it said.
System LSI faced trouble in procuring display driver IC due to the shutdown at Austin, but it collaborate with the foundry business and other foundries to flexibly procure chip production capacity, the South Korean tech conglomerate said.
Samsung expected the semiconductor business to turnaround in profitability in the second quarter from strong demand for memory products in general. The company will expand production of its 15-nanometer DRAM and Gen 6 V-NAND to secure cost competitiveness and strengthen its market leadership, it added.
The display unit recorded 360 billion won in operating income. Increased application of OLED panels by smartphone customers increased profits. But shortage in components by customers caused income to drop compared to the fourth quarter.
The mobile business recorded 4.39 trillion won in operating income. Demand for smartphones recovered in the quarter compared to a year ago, when the COVID-19 pandemic was at full swing.
Galaxy S21, which was launched in January, along with the Galaxy A series performed solidly in the quarter, Samsung said. PCs and tablets also sold well in the quarter, the company added, helping profitability.
For the second quarter, the company expected performance of its mobile business to drop from shortages in components and it being the off-season.
The consumer electronics business marked 1.12 trillion won in operating income. Profit increased from strong sales of TVs and appliances from continued pent-up demand and strong sales in developed markets.