photo = Yonhap News
Samsung Electronics posted its highest quarterly sales in the first quarter of this year. Since the third quarter of last year, it has been changing the highest quarterly sales for three consecutive quarters. It is evaluated that semiconductors played a pivotal role in a situation in which smartphone, TV, and home appliance performance stagnated compared to the previous year. The ‘semiconductor world’ is expected to continue for the time being. The industry explains that the foundry (semiconductor consignment production) volume secured over the next five years will reach 200 trillion won, eight times the sales of last year.
○The largest semiconductor ever won 200 trillion won order
Samsung Electronics announced on the 28th that it recorded 77.78 trillion won in sales and 14.12 trillion won in operating profit in the first quarter. Compared to the same period last year, sales and operating profit increased by 18.95% and 50.50%, respectively. Compared to the previous quarter, sales increased by 1.59% and operating profit by 1.84%.
It was the semiconductor business that drove the performance. In the first quarter, semiconductor sales recorded 26.87 trillion won and operating profit was 8.45 trillion won. This is the first time that Samsung Electronics’ semiconductor quarterly sales exceed 26 trillion won. Operating profit also reached the second-highest level in all quarters. The proportion of operating profit that semiconductors were responsible for was 59.84%.
It is evaluated that not only memory semiconductors such as DRAM and NAND flash, which are the existing flagship businesses, but also system semiconductors were well performed. Memory semiconductors for servers recorded the highest quarterly sales ever. Considering that the first quarter was traditionally the off-season for the parts industry, as well as adverse factors such as the Ukraine crisis and a sharp rise in raw material prices, this is an exceptional result.
The industry is paying attention to the fact that the foundry business is on track. The explanation is that the revenue pipeline, which used to be memory-centric, has become more diverse. The order volume is expected to expand further from 2Q, when the world’s first 3 nanometer (nm) advanced process verification is completed. “The order balance for the next five years at Samsung Electronics’ foundry is eight times larger than last year’s sales,” said Kang Moon-soo, vice president of Samsung Electronics’ foundry division, during a conference call for the announcement of the results. The industry estimates that Samsung Electronics’ foundry sales last year amounted to 23 trillion to 25 trillion won.
When pointed out that there are concerns about customer churn, such as Qualcomm and Nvidia moving foundry transactions to Taiwanese TSMC, he said, “The market concerns are excessive and we are maintaining solid partnerships with major customers.” Regarding the memory business, he explained, “We will increase profitability by increasing the proportion of high value-added semiconductor products such as DDR5, the next-generation memory standard.”
○Decreased profitability of mobile, TV, and home appliances
The DX (Device Experience) sector, which combines smartphones, TVs, and home appliances, recorded 48.7 trillion won in sales and 4.56 trillion won in operating profit in the first quarter. It recorded the highest sales in the quarter since 2013. This is the result of focusing on increasing the proportion of premium products while the market is saturated in each sector.
The MX (mobile experience) sector, which is in charge of the smartphone business, benefited greatly from the ‘Galaxy S22’, which was released in February. Thanks to the popularity of the ‘Galaxy S22 Ultra’ with a built-in S Pen, it recorded 31.23 trillion won in sales, an 11% increase from the same period last year.
However, profitability fell short of expectations. Operating profit in the MX division and the network division was 3.82 trillion won, down 0.57% from the same period last year. Operating profit in the TV and home appliances sector also fell 0.31% from the same period last year to only 800 billion won. It was explained that it could not escape the impact of the increase in raw material and logistics costs.
○Premium Concentration… The key to restoring market confidence
Samsung Electronics plans to focus on strategically expanding premium high value-added products in all business areas in the second quarter. “We expect macroeconomic uncertainty and logistics issues to continue in the second quarter,” said Seo Byeong-hoon, Samsung Electronics’ IR Team Leader (Vice President). . Jinman Han, Head of Strategic Marketing Department of Samsung Electronics’ Memory Business Division, said, “We will preemptively respond to market and customer demands.”
Despite the brisk earnings, shares of Samsung Electronics closed at 64,800 won, down 0.31% from the previous day. Following the previous day’s 64,900 won, the 52-week low continued for the second day.
This month, foreign investors’ net selling of Samsung Electronics reached 3.28 trillion won.
An electronics industry official said, “The opaque market outlook and the legal risks of Vice Chairman Lee Jae-yong have had a negative impact on the share price.
Reporter Jung Ji-eun jeong@hankyung.com
