Samsung’s financial report from the third quarter of 2020 – breaking records in the shadow of the coronavirus
Income Compared to the last quarter, the registered price has increased by 52%, which Samsung says is due to the increase in demand for smartphones and electronic household appliances, apart from efficient cost management. Samsung has also linked the 59% increase in annual profit this time to stronger sales of memory chips and consumer goods.
Samsung’s financial results in the third quarter of 2020 according to the company’s different divisions are as follows:
Mobile information and communication technology
The highest revenue Samsung, similar to most of the previous periods, belongs to the mobile information and communication technology sector, which in This turn has reached 30.49 trillion won with an increase of 4%. Samsung’s operating profit also reached 4.45 trillion won in this quarter, which shows a growth of more than 52% compared to the third quarter of last year. According to Samsung, the overall increase in demand in the market in the third quarter was accompanied by the support measures of many economies in the world, which greatly helped to recover the conditions of the closures caused by the coronavirus in the second quarter. The sales of Samsung phones have experienced a surprising increase this time, among which the share of flagships such as Galaxy Note 20 and Galaxy Z Fold2 has stood out from the rest, and sales of lower-end phones in key markets like India have also experienced strong growth.
Efficient cost management through standardization of parts and reduction of marketing costs has led to significant improvement in profitability and increased sales in the tablet and wearable category in products such as Galaxy Watch3, Galaxy Tab S7 and Buds Live earphones have also greatly contributed to the growth of profitability in the third quarter.
Samsung for the fourth quarter of 2020, increased demand compared to the third quarter predicted and related it to the seasonal conditions related to the end of the year and continued recovery in the overall market demand. In the fourth quarter of 2020, of course, according to Samsung, we will face a decline in smartphone sales, which is cited as the main reason for the decline in the effects of new flagship phones. Higher marketing expenses to meet competitive market conditions and year-end related conditions will also lead to lower profits in the next quarter from Samsung’s point of view.
Samsung for 2021 with The existence of an annual increase forecast due to the continued economic recovery and the acceleration of migration to 5G networks speaks of the continuation of doubts over the COVID-19 pandemic. The company has also mentioned its intention to expand smartphone sales by consolidating the production line of folding phones as well as cheaper mass-market models.
This subgroup of Samsung, in connection with the network business, also announced the signing of a major contract with the Verizon operator in America and the expansion of 5G coverage in South Korea and efforts to expand this business as much as possible. He has spoken globally and in regions such as North America and Japan.
Semiconductors and Display Panel
The Device Solutions section of the Samsung collection (consisting of two parts of Semiconductors and Display Panel or DP) also displays promising statistics. Semiconductors business in the Samsung group has achieved a revenue of 18.8 trillion won in the third quarter of 2020, although this revenue has only grown by 6.8 compared to last year, but its profit of 5.54 trillion won has experienced an extraordinary growth of 81.6%. has done.
This growth in the NAND memory sector has occurred due to the introduction of new phones and the continued growing trend of using larger memory on the one hand and the increase in the acceptance of SSD memory in home computers as well as high capacity memory in server customers.
Samsung attributes the extraordinary growth in the DRAM segment, apart from the negative effects of customers filling warehouses in response to global macroeconomic factors such as problems with tariffs and regulations related to the export of semiconductor goods. The demand for this product in servers mainly occurred due to higher capacity memory products and in PCs due to the need to replace system parts in large companies before the end of support for Windows 7, we have faced an increase in demand. In the mobile sector, the higher proportion of smartphones equipped with more than 8 GB of memory has been cited as the reason for improving the conditions of this sector.
For the third quarter of this year, in the NAND memory sector, Samsung has predicted an increase in demand for larger memory and higher prices in all applications, and this trend will continue for SSD memory and mobile memory with an increase in demand for higher capacities. In the field of DRAM, even though the filling of warehouses by customers will affect the conditions of the fourth quarter to some extent, Samsung is still optimistic about the strong trend of demand, especially in data centers. This demand in the PC sector is similar to the third quarter, and in the mobile category, with the introduction of new 5G phones, the demand for higher capacity memories will be strengthened.
The Foundry Business has achieved a record breaking monthly revenue this time, which is due to improved demand in mobile phones and increased demand for HPC chips or high performance computing systems. ) is attributed. In this regard, Samsung has also spoken about consolidating its position in this industry by starting to offer 5nm mobile chips.
Samsung’s DP business in the third quarter of 2020 achieved revenue and profit of 7.32 and 0.47 trillion won, which compared to the same time last year, have faced a decrease of 20.9 and 59.8 percent, respectively. Of course, Samsung has expressed satisfaction with these conditions and considered the increase in sales of smartphones, TVs and display panels to be effective in “improving earnings” in this sector despite the effects of the Corona pandemic. In the meantime, the income of mobile video panels has increased due to the improvement of demand from major customers, and the large screen sector has also been accompanied by an increase in panel prices and more sales of very large TVs and high-performance monitor panels with less loss than the previous season.
For 2021, Samsung has spoken about the gradual improvement of the smartphone market mainly thanks to 5G services and has announced a focus on improving its leadership position in the field of OLED panels.
The Consumer Electronics Division, which consists of two sub-sets of Visual Display and Digital Appliance, will be in the third quarter. The year 2020 has reached 14.09 and 1.56 trillion won in revenue and operating profit, respectively, and comparing these figures with the same figures in the previous year shows a 28.9 percent increase in revenue and a 183 percent increase in profit.
Demand for television in this period of time has been associated with significant growth due to the continued trend of staying at home, and Samsung’s online marketing and timely response to customer needs has also accelerated this positive trend.
The digital home appliance business has also experienced growth this time with the recovery of sales of advanced sets such as Bespoke refrigerators and Grande AI washing machines and dryers.
Capital expenses of Samsung in the quarter The third year of 2020 is 8.4 trillion won, which includes 6.6 trillion won in the semiconductor sector and 1.5 trillion won in video displays. Samsung’s total expenses between January and September 2020 have also been announced as 25.5 trillion won, of which 21.3 trillion won belong to semiconductors and 3.1 trillion won to displays.