Samsung financial report from the first quarter of 2022 – Impressive profit with high sales of memory and Galaxy S22 series
According to this report, the department Device eXperience has reached its highest revenue since 2013. At the same time, the Device Solutions sector has also managed to record a historical record in terms of quarterly revenue.
Besides the increase in product sales, the increase in the strength of the US dollar against the Korean won also affects the profitability of Samsung. has been effective and has left a positive impact of about 300 billion won on the operating profit of the company in the last quarter compared to the previous quarter.
The company’s total capital expenditures in the first quarter of this year reached 7.9 trillion Korean won, of which 6.7 trillion were spent on semiconductor products and 0.7 trillion were spent on display panels. Memory production costs have also been mostly focused on P3 infrastructure and transition to the new manufacturing process at factories in Hwaseong and Pyeongtaek, Korea, and Xi’an, China. On the other hand, investment in chip manufacturing factories has focused mostly on the development and creation of production capacity in advanced processes and less than 5 nm. Next, we will review the performance of Samsung’s various divisions in the first quarter of this year. :
Mobile and Network Experience
While overall smartphone demand has been low this period due to the characteristics of the first quarter of the year and what Samsung calls “geopolitical instabilities,” the giant In the period from January to March 2022, Korean managed to increase its operating profit and revenue from this segment to 3.82 trillion Korean won (about $3 billion) and 32.37 trillion Korean won (about $25.5 billion), respectively. The high sales figures of this company’s new flagship phones, especially Galaxy S22 Ultra With the S-Pen next to the new devices compatible with the fifth generation technology, the positive market reaction to the new models as well as the favorable supply of Device Ecosystem products including tablets and smart watches, among the factors influencing the positive conditions of Samsung’s income and operating profit have been in the mobile and network experience business.
Plus, despite some claims About the negative effect of a pre-installed application on the performance of some applications on Galaxy S22 , Samsung had previously announced that the demand for this smartphone The flagship van is 20% higher than the previous version. Although the phones initially hit stores due to inventory issues and pent-up demand, this has gradually improved with some colors and configurations being out of stock.
Samsung further predicts that this segment’s revenue will experience significant annual growth thanks to strong sales of the Galaxy S22 series (launched in February this year) and more sales of cheaper 5G models. Also, the company’s managers expect the Samsung Group to achieve sustainable profits despite facing macroeconomic instabilities by relying on its global supply chain capabilities.
The Korean company estimates that the difficulties associated with the lack of Galaxy S22 parts will gradually improve; However, it seems that these deficiencies will continue in the mobile field. For this reason, company managers plan to continue to focus on maintaining the sales trend in the field of flagship phones in the next quarter.
The mobile experience business is expected to expand its user base in the high-end segment and Maximize sales of new bendable products, along with increasing sales of new tablets and smartwatches, to maintain current levels of profitability. In the network business sector, the company will also look for new business opportunities and will continue the current successful trend by meeting the domestic needs of 5G, expanding its active presence in foreign markets and maintaining the leading position in VRAN (Virtual Radio Access Network) technology.
Samsung has achieved 26.87 trillion won (about 21.14 billion dollars) in revenue and 8.45 trillion won in operating profit in the device solutions sector, and despite the decrease Despite the slight gains, demand for server and PC chips has remained strong. According to the published report, this part of the Korean super company has experienced a significant jump in the last quarter following the increase in demand for data centers to store the huge amount of online data of users and managed to set a record in quarterly sales. According to Samsung, the sales of this segment increased by 41% compared to the same period last year due to strong demand for server memory chips, and its success is expected to continue with the continuation of the strong trend of demand for server chips. This company has also announced its plan to increase the supply of DDR5 and LPDDR5 interfaces, which can maintain the current upward trend.
The System LSI business also strives to meet the growing market needs by emphasizing the maximum supply of key components such as chips and image sensors. provide Also, Samsung’s semiconductor manufacturing business (Foundry Business) will consolidate its leading position and continue to attract more customers by striving for the first mass production based on 3nm GAA lithography.
Display panels business
This part of Samsung also witnessed a record in the first quarter following the high sales of smartphone screens to smartphone manufacturers. In addition, in the field of large displays, the improvement in production efficiency of QD (abbreviated quantum-dot) displays has exceeded expectations.
Samsung introduced its QD-OLED technology earlier this year during the CES exhibition. Kurd, which is different from the standard OLED, so that in the new technology, only blue organic light emitting diodes are used for a brighter output.
According to Samsung’s forecast, smartphone display sales will increase due to the expansion of the production of flexible products and the acceleration of the adoption of OLED technology in applications. New industries such as gaming, automotive and information technology will increase.
In the field of large screens, it is expected that the income of this sector will increase with the release of TVs with QD screens. Of course, the production of LCD screens will continue to decline in the second quarter, which is completely in line with Samsung’s predetermined plan.
TV business Samsung from Other parts of this company are lagging behind and after experiencing strong sales at the end of 2021 and the war between Russia and Ukraine, demand has decreased. It should be mentioned that the Korean company stopped providing its products to Russia in early March this year; Where Samsung has a large TV production factory and is apparently known as the top smartphone brand.
The income of the Visual Display segment increased with the increase in sales of advanced products such as very large TVs known as Super TVs with a size larger than 75 inches as well as Neo QLED TVs have experienced a decent increase compared to last year. The income of the digital household appliances business has also managed to register a seasonal record, relying on the growth of advanced products and especially BESPOKE series household appliances.
Samsung’s program in the Visual Display department will focus on selling new models such as Neo QLED and Freestyle; While the company’s digital home appliance business has also considered more income and profit through improving the product portfolio and increasing the availability of BESPOKE series home appliances in the global market.