A Samsung flag and South Korean national flag flutter outside Samsung headquarters in Seoul. Photo: AFP / Jung Yeon-Je

SEOUL – South Korean national flagship Samsung Electronics on Thursday reported a first-quarter 51% rise in operating profits, year-on-year, to 14.1 trillion won (US$11.1 billion), while raking in revenues of 77.8 trillion won ($61 billion) between January and April 2022.

Though the company motored comfortably through the pandemic years due to high demand for semiconductors among firms serving consumers trapped behind walls by the “stay at home, play at home” trend, demand is not dropping as the world enters the post-Covid era.

In a fast-digitizing world, Q1 2022 delivered the best quarterly results achieved by the nose-to-tail electronics giant in four years.

As well as being a year-on-year jump, Thursday’s numbers were also a jump in quarter-on-quarter terms. In Q4 2021, Samsung posted 76.57 trillion won in revenues and 13.87 trillion won in profits.

Thursday’s results were comfortably within the parameters of Samsung’s earnings guidance, issued on April 7, and were north of analysts’ expectations.

As ever, the company warned of macroeconomic uncertainties ahead, as well as ongoing logistics risks. Overall, however, given its large cash holdings and market-leading position in memory chips and smartphones, the firm looks bulletproof in the near term.

According to its disclosure, Samsung’s backbone, its memory chip business, achieved record-high quarterly sales for servers. The division posted 26.87 trillion won in consolidated revenue and 8.45 trillion won in operating profit in Q1.

“The memory business’s performance exceeded market forecasts as the memory price declined less than market expectations thanks to solid demand, mainly from server and PCs,” the company said.

A slight profit decline was due to a one-off special incentive and some seasonal factors.

Samsung expects DRAM chip demand to continue for servers throughout the year. Mobile chip demand should recover in the second half of 2022, Samsung predicted, with major manufacturers scheduled to release high-end models incorporating high value-added, high-density solutions.

The company expects NAND demand for servers to continue to grow, “driven by expanded investment, mainly for data centers, amid shortage issues in chip production and in active and passive components.” 

Samsung likely benefitted from a NAND production disruption suffered at a plant owned by rivals Kioxia/Western Digital, analysts said.

Elsewhere on the semiconductor front, Samsung’s foundry business, which makes bespoke, non-memory chips, saw “its highest-ever first-quarter sales” and “increased the portion of advanced processes,” the company said.

Though the number one player in memory, Samsung is the number two player in foundry, a distant second behind Taiwan’s TSMC. The company is continuously investing in its domestic and US-based foundries, Samsung said, while further synchronizing its R&D and production assets.

The company’s DX (Device Experience) unit, which makes smartphones, posted its highest revenue since 2013. The latest editions to Samsung’s flagship smartphone family, the Galaxy S22 series of devices, have outsold the prior versions by some 50% within the same time frame.

In the second half, Samsung aims to strengthen the “premium lineup and leadership position” of this division.