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Samsung’s Fourth-Quarter Income Is Finest Ever

Samsung’s Fourth-Quarter Income Is Finest Ever

SEOUL—

Samsung Electronics Co.

capped off a yr the place it surpassed Intel Corp. to develop into the world’s No. 1 chip maker because it logged its biggest-ever quarterly income.

The semiconductor {industry} cashed in on a supply-crunch set off by the pandemic that wreaked havoc throughout international companies, hampering manufacturing of all the pieces from autos to fridges to smartphones. Demand exceeded provide all through the previous yr, handing higher pricing energy to chip corporations comparable to Samsung and Intel.

The South Korean tech firm’s fourth-quarter outcomes mirror the extra favorable occasions. Internet revenue rose 64% to 10.84 trillion gained, or the equal of about $9 billion, versus 6.6 trillion gained a yr earlier. The agency’s semiconductor division was the driving force.

Primarily based in Suwon, the corporate reported document gross sales of 76.57 trillion gained for the quarter ended Dec. 31. That compares with 61.6 trillion gained a yr earlier.

Samsung’s efficiency barely topped market expectations. Analysts polled by S&P World Market Intelligence on common anticipated 10.7 trillion gained in internet revenue and 75.5 trillion gained in gross sales.

Samsung, the world’s largest maker of smartphones and televisions, is taken into account a tech-industry bellwether, as a serious electronics producer and elements provider to corporations comparable to Apple Inc. and Sony Group Corp.

A fingerprint sensor embedded within the display screen? An ultra-zoom digicam? A quicker 120Hz show? Samsung’s newest tells us rather a lot about what may come from Apple subsequent iPhone. WSJ’s Joanna Stern sifts by years of Galaxy and iPhone proof. Photograph illustration: Preston Jessee for The Wall Avenue Journal

For the complete yr, Samsung’s internet revenue rose 51% to 39.9 trillion gained, whereas income grew by 18% to 279.6 trillion gained.

Samsung’s standing as the highest chip maker by income comes because the semiconductor {industry} embarks on a spending spree to crank out extra superior chips and to increase capability. Intel, which focuses on microprocessor chips that go into PCs and servers, had been No. 1 for almost the entire previous three many years, ceding the spot to Samsung solely in 2017 and 2018 when memory-chip costs surged.

However final yr proved significantly profitable for Samsung’s enterprise in reminiscence chips, which have seen costs soar and are extra ubiquitous throughout the digital world than Intel’s microprocessors. The South Korean agency’s semiconductor income for 2021 rose 29% year-over-year to 94.16 trillion gained, or $78.4 billion.

That was sufficient to propel Samsung to the chip {industry}’s No. 1 by gross sales, in response to

Gartner Inc.,

a tech market researcher.

How the Greatest Corporations Are Performing

Samsung’s sturdy efficiency comes on the heels of a serious shake-up inside South Korea’s largest tech firm. Final month, the corporate changed all three of its co-CEOs and merged two enterprise items, its cellular and shopper home equipment teams, into one. The corporate stated the actions have been supposed to assist lead it into the subsequent section of development and to strengthen its enterprise competitiveness.

Samsung stated it anticipated reminiscence demand to remain sturdy this yr, pushed by data-center servers and 5G telephones. Nevertheless, purchaser urge for food might be curbed resulting from manufacturing constraints created by part shortages and supply-chain points.

The corporate has additionally been ramping up its funding within the contract-chip making enterprise, together with a brand new $17 billion manufacturing facility in Texas. Chip provide ought to stay tight this yr, stated Kang Moon-soo, govt vp of Samsung’s foundry division, on Thursday’s earnings name.

Samsung’s cellular enterprise division reported a comparatively strong quarter due partly to a powerful rollout of its premium foldable telephones, the Galaxy Z Fold 3 and Galaxy Z Flip 3, that launched in August.

The corporate’s cellular division logged fourth-quarter working revenue of two.66 trillion gained, a ten% rise from the prior yr, whereas income elevated 30% to twenty-eight.95 trillion gained. Nevertheless, working revenue dropped on a quarterly foundation resulting from an increase in advertising bills. Part shortages are additionally curbing total telephone manufacturing.

Samsung is about to debut its newest flagship smartphone, the Galaxy S22, on Feb. 9. Three variations of the telephone are anticipated to be unveiled.

Write to Jiyoung Sohn at jiyoung.sohn@wsj.com

Copyright ©2022 Dow Jones & Firm, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

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