Samsung increases profit significantly thanks to strong chip demand
Samsung is benefiting from the large demand for capacity in data centers. This is what drives profits in the chip business in particular.
The continuing boom in demand for chips has once again brought the electronics giant Samsung significant increases in sales and profits in the first quarter.
The surplus rose by 58.5 percent year-on-year to 11.32 trillion won (about 8.5 billion euros), as the South Korean company reports. Sales reached a quarterly record of 77.8 trillion won (58.2 billion euros). Samsung Electronics is the market leader in memory chips as well as smartphones and televisions.
Semiconductor manufacturers benefit from pandemic
In the corona pandemic, the need for capacities in data centers has increased noticeably. Despite delivery bottlenecks, semiconductor manufacturers such as Samsung and Intel in particular benefited from this.
In the first quarter, the business with memory chips in particular exceeded market forecasts, according to a Samsung statement. This is due to the fact that prices have fallen less than expected thanks to robust server and PC demand.
The operating profit of the semiconductor division alone rose to 8.45 trillion won at the same time as a quarterly record – more than twice as much as a year earlier. With a view to the second quarter, Samsung predicted that the demand for memory chips will continue to develop robustly despite ongoing uncertainties.
Positive development also for smartphones
In the smartphone business, the Group can also look back on a positive development despite a general decline in demand. The decline, both in comparison to the fourth quarter of 2021 and in a year-on-year comparison, is due to the weaker season and “geopolitical uncertainties”, it said.
Nevertheless, sales and profitability increased despite delivery bottlenecks for components. The growth was also driven by strong sales of the new flagship models from the Galaxy S22 series released in the first quarter. The business with smartphones suitable for the mass market for the 5G mobile communications standard has also proven to be profitable.
The competitor of the iPhone manufacturer Apple also expects a slight decline for the entire market for the second quarter. At the same time, the South Koreans expressed confidence in the sales of the new models from their own production.