Samsung Electronics’ Semiconductor Business Has Best-Ever Business Performance

Samsung Electronics’ semiconductor business posted the highest-ever ratio of operating profit to sales of more than 60 percent for the 1st quarter of this year, leading the company to its best-ever business performance. 

As demand for DRAMs and NAND Flash chips remains strong in the second quarter of this year, some predictions have already indicated that Samsung Electronics will likely surpass the 60 trillion won barrier in operating profit for the whole of the year. But the outlook for Samsung Electronics’ best-ever business performances will likely depend on Chinese chip makers, which are forecast to flood the market with their own DRAMs and NAND Flash memory chips after 2019.

Samsung Electronics said on April 26 it chalked up 60.56 trillion won in sales and 15.64 trillion won in operating profit in the first quarter of the year. The figures represent an 8 percent drop in sales compared to the fourth quarter of last year, but an about 3 percent rise in operating profit, showing an improvement of profitability. 

Leading Samsung Electronics’ charming business performance is the company’s memory business sector with its proprietary technology competitiveness. The semiconductor business logged 20.78 trillion won in sales and 11.55 trillion won in operating profit, seeing a ratio of operating profit to sales stand at 55.6 percent. 

Samsung Electronics has seen a ratio of operating profit to sales jump 15 percentage points to 55.6 percent in one year from 40.3 percent in the 1st quarter of 2017. That’s partly due to the company’s four to five years head start in technology.

The ratio of operating profit to sales for the semiconductor business is so huge that the figure accounts for 73.3 percent of the company’s total ratio of operating profit to sales. Despite the off-season, the solid business performance was attributable to a strong demand with a focus on servers and the company’s marketing priority to high-capacity, high-value added products, a Samsung Electronics official said.