In 2021, the net profit of Q3 Samsung Electronics was 12.06 trillion won, with a year-on-year increase of 30%

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Samsung Electronics released its third quarter earnings for 2021 as of September 30 on Thursday, exceeding analysts’ expectations. Previously, a long-term shortage of semiconductors pushed up the price of storage and system chips for computers and mobile devices. According to the financial report, the revenue of Samsung Electronics in the third quarter was 73.98 trillion won (about US $63.2 billion), a year-on-year increase of 10%; Operating profit was 15.82 trillion won (about US $13.5 billion), a year-on-year increase of 26%; The net profit was 12.06 trillion won (about US $10.3 billion), a year-on-year increase of 30%; Analysts’ average forecast is 11.54 trillion won (about US $9.8 billion).

(from: Samsung)   Newsroom）

In the third quarter, the total revenue of Samsung Semiconductor Business was 26.41 trillion won (about US $22.5 billion), and the operating profit was 10.06 trillion won (about US $8.57 billion).

The display panel business revenue was 8.86 trillion won (about US $7.55 billion), and the operating profit was 1.49 trillion won (about US $1.27 billion). Compared with the previous quarter, the overall display revenue improved, mainly because of the strong sales of small and medium-sized OLED panels despite the weak performance of the large display business.

The it and mobile communication departments announced that the comprehensive revenue in the third quarter was 28.42 trillion won (about US $24.2 billion), and the operating profit was 3.36 trillion won (about US $2.86 billion). With the launch of Galaxy Z fold 3 and Galaxy Z flip 3, Samsung’s mobile business has gained new development momentum.

The consumer electronics sector, composed of visual display and digital electrical appliances, had comprehensive revenue of 14.1 trillion won (about US $12 billion) and operating profit of 0.76 trillion won (about US $650 million) in the third quarter.

Samsung’s capital expenditure in the third quarter reached 10.2 trillion won (about US $8.69 billion), including 9.1 trillion won for semiconductors and 0.7 trillion won for displays. So far, the total capital expenditure in 2021 is 33.5 trillion won (about US $28.55 billion), including 30 trillion won for semiconductors and 2.1 trillion won for displays.

Samsung Electronics had a very strong performance in the third quarter, with a new single quarter record in revenue and the highest operating profit since the third quarter of 2018. Samsung’s strong performance in the third quarter was mainly due to the continuous and strong growth of its chip business, the rise of memory chip prices, the improvement of yield and the improvement of profitability of chip OEM business. At the same time, the depreciation of the won also had a positive impact on Samsung’s performance.

Novel coronavirus pneumonia, the world’s largest chip and mobile phone maker, has benefited from strong demand, and rising semiconductor prices have further boosted its demand as the global economy recovers from the new crown pneumonia epidemic. However, as countries have lifted epidemic restrictions and the demand for it products slows down, the price of storage chips may begin to cool this quarter, because customers are not so eager to place new orders after hoarding inventory, which may put pressure on the company’s performance in the fourth quarter.

Bloomberg analyst Masahiro wakasugi said: “South Korea’s DRAM chip exports may continue to grow rapidly, but prices may continue to weaken. In September, DRAM exports increased by 29% year-on-year to $3.78 billion, the highest since November 2018. However, the spot price often used for small transactions began to sink from August, and the price of large contracts may fall soon.”

Trendforce, an industry tracking agency, predicts that DRAM prices will decline by 15% to 20% year-on-year in the fourth quarter and will enter a downward trend early next year because supply is expected to exceed demand.

In the third quarter, Samsung’s smartphone shipments and average selling price increased compared with the previous quarter, thanks to the launch of new foldable models. According to the report released by meritz securities, Galaxy Z fold 3 and Galaxy Z flip 3 may have sold 2.8 million units in the third quarter and about 3.6 million units in the fourth quarter.

Samsung’s share price has fallen more than 10% this year, and industry observers predict that the memory chip market will begin to cool down. Server customers have accumulated inventory, which puts pressure on storage chip suppliers to reduce prices. Competitor SK Hynix previously said that with chip suppliers managing capacity according to demand, the supply flexibility has been different from that in the past, which echoed micron’s view that the sharp fluctuation between shortage and oversupply is easing.

Nevertheless, chip suppliers are optimistic that demand will not decline. Lisa Su, chief executive of AMD, gave an optimistic outlook on Tuesday. She predicted strong demand for servers and game console chips in 2022, and predicted that the personal computer market would remain “flat”.

Although Samsung is better known outside Korea as a smartphone, its profits are largely driven by the memory chip business. Semiconductors usually account for the largest share of their revenue.

The company is preparing for a major technological upgrade to the so-called ddr5 memory chip, which is faster than the previous generation and improves energy efficiency. Kim Young woo, an analyst at SK securities, said that Samsung’s 14 nm ddr5 products are highly competitive and will bring good news to the company. The long latency of new server processors using ddr5 may affect demand.

Samsung is also betting on more advanced chip manufacturing processes as a driver of growth. Daishin securities predicts that by 2026, Samsung’s OEM revenue will grow at an average annual rate of 24%, and this year’s growth rate will reach 30%. Samsung plans to start producing 3nm chips in the first half of the year, while TSMC, the industry leader, is expected to start mass production with this process in the second half of 2022.

More reading from Netease Technology: Samsung Electronics earnings outlook: it is expected that Samsung Electronics’ revenue in Q2 will be US $43.6 billion in 2020, a year-on-year decrease of 7.3%. Samsung Electronics earnings: Samsung Electronics’ operating profit in Q1 will be 6.2 trillion won in 2019, a year-on-year decrease of 60.36%. Samsung Electronics earnings: Q3 Samsung Electronics’ profit in 2018 will be US $15.4 billion, a year-on-year increase of 21%. Samsung Electronics earnings: Q3 Samsung Electronics’ net profit in 2020 will be US $8.3 billion Samsung Electronics reported a year-on-year increase of 48.9%. Samsung Electronics reported a net profit of $9.8 billion in Q2 2018, which was flat year-on-year. Samsung Electronics reported that the operating profit of Q4 Samsung Electronics in 2016 increased by 50% year-on-year, and the chip business performed strongly. Samsung Electronics reported that the net profit of Q1 Samsung Electronics in 2020 was $3.9 billion, down 3% year-on-year. Samsung Electronics reported that the net profit of Q2 Samsung Electronics in 2015 was $4.9 billion, down for five consecutive quarters It is estimated that the net profit of Samsung Electronics in Q1 2015 will be USD 5.44 billion, a year-on-year decrease of 30.5%. Samsung Electronics financial report: the profit of Q4 Samsung Electronics in 2018 will be USD 7.6 billion, a year-on-year decrease of 30.9%. Samsung Electronics financial report: the net profit of Q2 Samsung Electronics in 2020 will be USD 4.7 billion, a year-on-year increase of 7.2%. Samsung Electronics financial report: the operating profit of Q4 Samsung Electronics in 2016 will be USD 7.8 billion, a year-on-year increase of 50%. Samsung Electronics financial report: Q4 Samsung Electronics in 2019 The net profit of Samsung Electronics fell year-on-year for the fifth consecutive quarter. Samsung Electronics financial report: in Q2 of 2021, Samsung Electronics net profit was US $8.2 billion, a year-on-year increase of 72%. Samsung Electronics financial report: in Q3 of 2014, Samsung operating profit was US $3.8 billion, a year-on-year decrease of 59.7%

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