Samsung Reports Highest Revenue in 2021 with Chip Business Leading Profitability

Samsung executive Lee Jae-yong, second from right, visited the company’s Pyeongtaek chip factory on the first working day of 2021.

Picture: Samsung

Samsung on Thursday said it posted revenue of 279.6 trillion won and operating profit of 51.63 trillion won for fiscal 2021. This is an increase of 18% and 43.5 %, respectively, compared to the previous year. The revenue is Samsung’s highest to date, with the company saying its strong performance was propelled by strong cellphone and chip sales.

In the fourth quarter alone, the company posted revenue of 76.6 trillion won and operating profit of 13.9 trillion won, up 24% and 53.3%, respectively, from the same period in 2020.

Samsung said revenue growth in the fourth quarter was driven by increased sales of its high-end smartphones and consumer electronics. Its operating profit also rose on the back of performance in its chip business, although a special bonus was paid to employees in the quarter, the South Korean tech giant said.

During the fourth quarter, Samsung’s chip business contributed more than half of the company’s operating profit with 8.84 trillion won. Samsung said it has seen strong demand for server memory products. The company, however, faced global supply chain issues and lower average chip prices in the quarter, which caused it to refrain from pushing sales expansion too aggressively.

Meanwhile, Samsung’s mobile business was the second largest contributor to operating profit with 2.66 trillion won. Despite the shortage of chips, the business unit has seen growth thanks to increased sales of its high-end smartphones, such as foldable phones and the Galaxy S series, as well as its PC products, the company said. . Profitability, however, was hurt by marketing spend on foldable phones, Samsung said.

The company’s billboard business also contributed 1.32 trillion won to quarterly operating income due to strong demand for mobile billboards from major customers, a likely reference to the business. mobiles from Apple and Samsung, which respectively buy OLED panels and foldable panels from the display. panel business unit.

Samsung’s consumer electronics business posted an operating profit of 700 billion won in the quarter. Businesses saw the effects of pent-up demand for TVs and home appliances wane, but the tech giant said it responded by improving product mix and operational efficiencies to protect its bottom line.

As for Samsung’s logic chip and foundry unit, it recorded its highest quarterly revenue to date thanks to strong demand. The company’s total capital expenditure in 2021 was 48.2 trillion won, including 43.6 trillion won invested in its chip facilities.

For 2022, Samsung said it expects demand for IT products to recover and issues related to supply chain issues and the COVID-19 pandemic will persist. He added that he would focus on offering premium products in components and products in light of this environment.

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Sallie R. Loera