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    Samsung’s Profit Jumps on Strong Demand for Consumer Tech — Update

    By Timothy W. Martin 

    SEOUL– Samsung Electronics Co.’s first-quarter web revenue rose 46%, boosted by a higher urge for food for the South Korean tech big’s devices and home equipment that softened the monetary hit from a brief shutdown of its U.S. semiconductor manufacturing.

    The world’s largest smartphone and memory-chip maker reported a web revenue of seven.14 trillion South Korean received, or the equal of about $6.4 billion, up from 4.88 trillion received the prior yr. Income rose 18% to 65.4 trillion received for the three months ended March 31.

    Samsung is a proxy for the worldwide tech world, making a variety of digital devices whereas serving as a parts provider for its largest rivals.

    Lately, the Suwon, South Korea-based agency had cashed in on chips. However Samsung’s Texas semiconductor manufacturing was shut down for weeks earlier this yr resulting from extreme climate. Because of this, working income for chips dipped 16% to three.37 trillion received.

    The power is now totally operational, although the disruptions meant about 71,000 wafers have been affected, main to break of round 300 billion to 400 billion received, stated Shawn Han, a senior vice chairman for Samsung’s foundry enterprise, throughout Thursday’s earnings name. Samsung is speaking with native authorities and utility corporations about keep away from the same shutdown sooner or later, he added.

    Energy in Samsung’s cell and consumer-electronics enterprise helped energy outcomes that topped market expectations of about 6.5 trillion received in web earnings and 63.4 trillion received in income, based on analyst estimates gathered by S&P World Market Intelligence.

    Working income for Samsung’s cell division soared by 65%, to 4.39 trillion. The outcomes have been aided by an earlier launch of its Galaxy S21 flagship telephone, which made its debut roughly a month forward of its standard timetable. It was the primary time in almost 5 years that the agency’s mobile-unit working income topped these of semiconductors.

    It was additionally helped by a weakening of some key rivals. China’s Huawei Applied sciences Co. has been hit by sanctions, whereas LG Electronics Inc. not too long ago declared its exit from the mobile-phone trade.

    Samsung’s consumer-electronics working income greater than doubled to 1.12 trillion received. However the firm warned that demand for TVs might fall within the latter half of the yr, as extra nations attain herd immunity and shift from dwelling leisure to outside actions.

    Massive tech corporations have flourished, as individuals spend extra of their time–and money–online. Chip makers have been explicit beneficiaries in the course of the pandemic. Fellow South Korean semiconductor big, SK Hynix Inc., reported Wednesday its first-quarter web revenue had risen 53% from the prior yr.

    Samsung forecast a big enchancment in semiconductor income within the present quarter. Amid a worldwide chip scarcity, Samsung stated demand for its semiconductors will stay sturdy as world economies rebound.

    Costs for the 2 main sorts of reminiscence chips, of which Samsung is the No. 1 producer, are anticipated to extend this spring. Costs for NAND flash, which fell within the opening months of the yr, ought to rise, whereas costs for DRAM, which give gadgets multitasking energy, ought to develop 15% to twenty%, stated Sanjeev Rana, a senior analyst at CLSA, a Seoul-based brokerage.

    As an electronics producer, Samsung stated element shortages have compelled discussions with retailers and different massive consumers to find out which devices and home equipment the South Korean producer needs to be prioritizing.

    “We’re at present rebalancing our total manufacturing,” stated Ben Suh, an govt vice chairman for investor relations, on the earnings name.

    Samsung’s chief, Lee Jae-yong, stays behind bars after receiving a 30-month jail sentence in a retrial of his 2017 conviction for bribing a former South Korean president. His prior time in jail of roughly a yr counted towards his new sentence, which means he may very well be launched in July 2022.

    On Wednesday, Mr. Lee and his household outlined plans to pay a greater than $10 billion inheritance-tax invoice, which it plans to do over a number of installments over the subsequent 5 years. Samsung did not provide a lot element on how exactly the Lee household would give you the funds. Company-governance consultants say the household is prone to depend on dividends from their Samsung holdings, whereas securing a mortgage backed by their firm shares.

    Write to Timothy W. Martin at timothy.martin@wsj.com

     

    (END) Dow Jones Newswires

    April 28, 2021 23:34 ET (03:34 GMT)

    Copyright (c) 2021 Dow Jones & Firm, Inc.

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