SEOUL (AFP) – South Korean tech giant Samsung Electronics said yesterday its operating profit rose 53.3 per cent in the fourth quarter of 2021, as record sales helped overcome pandemic-induced supply chain challenges.
The world’s biggest smartphone maker said its operating profit rose to KRW13.87 trillion (USD11.55 billion) for the October-December period in 2021, up from KRW9 trillion in the same quarter the previous year.
Thanks to high memory chip prices and strong consumer demand, Samsung had its highest annual sales of KRW279.6 trillion in 2021, an 18-per-cent jump from a year earlier, the company said in a regulatory filing.
Samsung achieved “record sales thanks to competitive products, despite continuing uncertainty”, the tech giant said in a statement, singling out solid demand for its premium smartphone lines.
While the Covid-19 pandemic has wreaked havoc on the global economy, it has helped many tech companies boom.
Pandemic-driven working from home has boosted demand for devices powered by Samsung’s chips, as well as home appliances such as televisions and washing machines.
But LG Electronics, South Korea’s second-largest appliance firm after Samsung, saw its operating profit shrink by 21.4 per cent in the fourth quarter on-year to KRW677.7 billion.
The world’s biggest memory chip maker, Samsung Electronics has aggressively stepped up investment in its semiconductor business as the world battles chip shortages that have hit everything from cars and home appliances to smartphones and gaming consoles.
The global chip supply shortage is expected to persist well into the new year, analysts
“In the Memory Business, demand is expected to grow as enterprises ramp up IT investments while the Company will expand supply of high-performance products,”
In November, Samsung announced a new microchip factory in Texas, a USD17 billion investment. The plant is expected to be operational by the end of 2024.
Samsung is also investing in the development of advanced technologies such as artificial intelligence and robotics, as well as 5G and 6G communications.
Analyst at Cape Investment and Securities Park Sung-soon said that memory chip prices were likely to decline in the first half of 2022.
“Samsung’s profit is likely to dip for the January-June period. But we also expect chip prices to turn around in the second half, giving a boost to company profits,” he said.