Samsung Electronics saw its revenue and operating profit jump in the first quarter of 2021 thanks to strong demand for its smartphones and consumer electronics.
The South Korean tech giant said on Thursday that it recorded revenue of 65.4 trillion won and operating profit of 9.38 trillion won in the quarter, an increase of 18.2% and 45.5%, respectively, from the same time period a year prior.
Strong sales of mobile products, digital appliances, and TVs outweighed lowered earnings from its chips, the company said.
Samsung’s mobile division contributed the most in operating profit with 4.39 trillion won. Overall demand in the quarter recovered from a year prior when the market was impacted by the COVID-19 pandemic, the company said.
The consumer electronic division also added 1.12 trillion won in operating profit. Pent-up demand for appliances and TVs continued in the quarter, the company said.
The semiconductor division recorded 3.37 trillion won in operating profit, its lowest performances in years.
Demand for memory products was high, but prices dropped and Samsung spent more in ramping up new production lines. The disruption at its plant in Austin, Texas also dented earnings of its foundry operation, the company said.
Its logic unit, called System LSI by the company, saw increased supply of mobile SoCs and image sensors to phones but earnings were flat from difficulty in procuring display driver chips due to the shutdown in Austin.
In the second quarter, however, earnings by its semiconductor division is expected to significantly improve due to strong demand across the board, from 5G products, PCs, and servers, the South Korean tech giant said. The logic unit will also increase cooperation with Samsung’s own foundry unit as well as outsource production in the quarter, it said.
The performance of its mobile division is expected to weaken from diminishing new product effect and component supply shortages in the second quarter, Samsung said. The company claimed it will achieve solid profits in the second half of the year by popularising the foldable category and enhancing its mass market 5G line-up.
The Lee family pay the full amount, the largest-ever inheritance tax payment in South Korea, over a period of five years in six instalments.
In a difficult market, with Apple often thought of as the one and only, Samsung managed to be exceptionally effective. At least that’s what experts say.
The company’s Galaxy Upcycling at Home program will allow consumers to repurpose their older phones into IoT devices, such as childcare monitors and light sensors.