02 February 2021
Samsung has posted its fourth quarter and FY 2020 results. Samsung has proudly announced that it managed to make a profit despite the hurdles posed by the COVID-19 pandemic. The company posted 35.99 trillion won ($32.1 billion) operating profit and for the entire year, it reported 236.81 trillion won revenue ($211.5 billion) in revenue. Profit rose 26.4 percent year-on-year, thanks to display and memory chip business, “but fell 26.7 percent from the third quarter due to weaker memory prices and sluggish consumer products sales, as well as higher marketing costs.”
Samsung’s display and semiconductor business always contribute the maximum to its overall revenue. This time is no different, though its memory and foundry business saw earnings decline quarter-on-quarter despite solid shipments. The South Korean giant, however, managed to make a profit from the Display Panel Business. Samsung says the credit goes to a sharp rise in demand for mobile display production and in the large panel market.
While Samsung managed to make a profit and overall good revenue over the previous year, the breakdown in the report suggests its several businesses got hit by so many different factors.
The Mobile Communications Business and Consumer Electronics Division reported a QoQ decline in profit. This is due to weaker sales, increased costs. However, its Networks Business saw improved earnings, thanks to 5G service expansion in Korea and 4G/5G rollouts globally.
Samsung also looks forward and predicts what it expects from the coming quarter. Samsung expects overall profit to weaken in the first quarter of 2021. However, it expects all those sectors that didn't contribute well in Q4 2020 will now grow. System LSI business plans to expand further as it will respond to 5G SoCs demand and the foundry business is set to increase 5nm SoC production. The Mobile Communications Business, on the other hand, will see robust sales of flagship smartphones, thanks to Galaxy S21. Samsung has plans to increase sales of flagships, foldable, and new 5G models.
But, the memory business will continue to be affected due to the ongoing strength in the won and costs associated with the production lines.
While the Consumer Electronics Division is likely to post stable results, thanks to the expansion that Samsung has planned. Samsung may bring more Neo QLED, Micro LED TVs, and Bespoke appliances. The Memory business is expected to revive during the H1. Samsung believes the strong demand from mobile and server applications is likely to help in reviving the DRAM market.