Affected by expanded spending Samsung's Q4 profits were not as good as market expectations

Samsung Electronics reported fourth-quarter earnings on Thursday (27th), with profits up more than 60 percent, still lower than industry expectations, reflecting the impact of expanded spending on the production of advanced chips and panels. Samsung said that the supply chain and the epidemic still pose challenges.

Samsung's net profit climbed 64% to 10.84 trillion won ($8.9 billion) in the fourth quarter, and revenue rose 24% to 76.6 trillion won in the fourth quarter, a record high in four consecutive quarters. Operating income jumped 53 percent to 13.9 trillion won ($11.6 billion), roughly in line with a more than 50 percent increase at the time of the initial earnings announcement earlier this month.

Among them, the chip division's profit in the fourth quarter more than doubled to 8.84 trillion won.

Samsung said that due to the increase in IT investment and the launch of new CPUs, server demand is expected to continue to grow this year, and the demand for mobile chips will also climb with 5G business opportunities.

The stock prices of Samsung and peer SK Hynix both fell in the second half of last year, and the market is worried that sharp fluctuations in chip prices and rising inventory levels will cause the semiconductor industry to fall into a downturn cycle again. But the final price decline was not as severe as expected, because the chip was increasingly widely used and manufacturers took measures to stabilize supply in advance.

Samsung is optimistic about the prospect of chip demand, actively expanding spending and accelerating advanced research and development technology, but this requires more Esmol's extreme ultraviolet light (EUV) equipment, which has become a must for the chip industry. In addition, Samsung also issued a special bonus in December last year.

According to the earnings report, Samsung's capital expenditure in 2021 was 48.2 trillion won (about $40 billion), of which the part spent on semiconductors was $36.3 billion, higher than TSMC's $30 billion.

Samsung said on Wednesday that due to the slowdown in the epidemic in Xi'an, the Xi'an plant has resumed normal operations. In addition, the company officially issued an invitation letter on the same day, and will publish the Galaxy S22 series mobile phones online on February 9.

Source: Juheng.com

Cover image source: Paixin.com