Samsung Electronics has released its financial results for the second quarter of the fiscal year 2021, which ended on June 30, 2021.
Total sales reached KRW 63.67 trillion, up 20% from the previous year and a new high for the second quarter. Operating profit increased 34% to KRW 12.57 trillion as market conditions improved in the memory market, operations at the Austin foundry fab were normalized, and effective supply chain management (SCM) helped the finished product businesses maintain solid profitability.
As memory shipments exceeded earlier forecast and price increases were larger than projected, the Semiconductor business enjoyed a considerable boost in profitability, while the Company improved its cost competitiveness. Profits in the Display Panel Business were increased by a one-time gain and a rise in general prices.
Due to component supply shortages and COVID-19-related manufacturing interruptions, earnings in the Mobile Communications Business fell short of expectations in the prior quarter. However, the business was profitable as a result of the Company’s global SCM capabilities, improved cost structure, and ongoing contributions from tablets and wearables.
As demand remained robust, the Consumer Electronics Division recorded outstanding results, owing to increasing sales of premium products.
The Company intends to sustain good profitability in smartphones and consumer electronics by increasing its premium category leadership. The dangers of prolonged component supply interruptions and COVID-19-related uncertainty are expected to prevail. The Company will focus on improving product and technical leadership in the second half.
The Memory Business is expected to enjoy continued demand growth for server and mobile products, and the Company plans to speed up the transition to 15-nm DRAM and 6th-generation V-NAND, as well as expand the use of the extreme ultraviolet (EUV) lithography process in DRAM production. As new smartphones are released, demand for critical System LSI products is projected to rise, while the Foundry Business will accelerate growth by extending the Pyeongtaek S5 Line capacity and optimizing pricing to support future investment cycles.
The mobile panel segment of the Display Panel Business is projected to improve as major customers introduce new flagship models, and the Company will concentrate on finishing the mass manufacturing process for quantum-dot (QD) displays, with shipments set to commence later this year.
The Mobile Communications Business expects to increase revenue and profit. The Networks Business will continue to explore new prospects in Europe and other regions while driving revenue growth in major markets such as North America. Galaxy Ecosystem items are expected to continue to be sold at a higher rate.
By strengthening global sales of the Bespoke product line, the Consumer Electronics Division will solidify its position in the premium TV market and grow revenue from digital appliances.
The Company spent KRW 13.6 trillion on capital expenditures in the second quarter, with KRW 12.5 trillion on semiconductors and KRW trillion on displays. In the first half, total capital expenditures were KRW 23.3 trillion. The Memory Business invested primarily to meet future demand by expanding capacity and migrating processes to upgraded nodes.
