Samsung Electronics reports record sales in the first quarter

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Samsung Electronics reports record sales in the first quarter

Researchers at Samsung Electronics work at the company chip factory in Hwaseong, Gyeonggi. [SAMSUNG ELECTRONICS]

Researchers at Samsung Electronics work at the company chip factory in Hwaseong, Gyeonggi. [SAMSUNG ELECTRONICS]

 
Samsung Electronics reported record sales in the first quarter on Thursday, as solid memory chip and home appliance sales offset weak demand for system chips and sensors.  
 
Sales rose 19 percent to 77.8 trillion won ($61.4 billion) in the January-March period, an all-time high and above the FnGuide market consensus of 75.6 trillion won.
 
Net profit increased 58.6 percent on year to 11.3 trillion won in the first quarter, compared to an FnGuide forecast of 10.3 trillion won.  
 
The chip business generated 8.45 trillion won in operating profit, up 150.7 percent on year, as memory prices did not fall as much as expected while demand remained strong.  
 
"Memory business performance exceeded market forecasts as memory prices declined less than market expectations on solid demand," the electronics maker said in a statement.  
 
The company's contract chipmaking — or foundry ― business had its best first quarter ever, which Samsung attributed to robust demand and improved yields.  
 
"The 5-nanomter node is in a mature yield stage, delivering stable yields," said Kang Moon-soo, senior vice president and head of Samsung's foundry market and strategy team, during a conference call.  
 
"In the case of the 4-nanometer node, while there was a bit of delay in the initial yield ramp-up, we are back on the expected yield improvement curve since we've been focusing on early stabilization," he said.  
 
The chipmaker plans to stick with its previously announced plan to mass produce 3-nanometer chips in the second quarter, ahead of TSMC, which is targeting the second half.  
 
"We've improved the node development system of the 3-nanometer process," Kang said. "We now have verification for each stage of development. This will help us reduce the yield ramp-up period later on, improve profitability and ensure a more stable supply."
 
According to press reports, the company has been experiencing yield-related challenges in the manufacturing of 3-nanometer chips. Sources close to the company have questioned whether Samsung Electronics will be able to stay on schedule.  
 
The company's Mobile eXperience (MX) business, which covers smartphones and network equipment, generated 3.82 trillion won in operating profit, down 13 percent on year.
 
The consumer electronics division registered 800 billion won in operating profit, down 28.6 percent on year, but sales hit a record 15.5 trillion won. The company attributed the sales record to rising demand for premium products, like Bespoke-brand appliances.  
 
Operating profit for the display business rose by 202.8 percent to 1.1 trillion won. Sales of organic light-emitting diode (OLED) panels for mobile devices drove growth.  
 
The company said it will focus on high-end memory chips and appliances and seek to win more system chip and foundry orders.    
 
The tech company spent 7.9 trillion won in facility investment in the first quarter, with 6.7 trillion won going towards semiconductors.  
 
LG Electronics achieved record sales and operating profit in the first three months of the year, beating the market consensus.  
 
The upbeat result is attributed to a one-time gain related to licensing patents and to healthy sales of premium televisions and appliances.  
 
The electronics maker reported an operating profit of 1.9 trillion won in the first quarter, up 6.4 percent on-year and higher than the market consensus of 1.1 trillion won, which was published by FnGuide.
 
It's net rose 19.8 percent to 1.4 trillion won, boosted by an 868.9 billion won extraordinary item, compared to a forecast of 697.3 billion won.
 
Sales were 21.1 trillion won, an 18.5 percent increase on year and higher than the market expectation of 18.7 trillion won.  
 
Shares of Samsung Electronics fell 0.3 percent to 64,800 won on Thursday. LG Electronics rose 0.84 percent to close at 120,500 won.
 

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]
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