South Korean tech giant’s fourth-quarter net profits also rise—by 64%
SEOUL — Samsung Electronics Co. capped off a year where it surpassed Intel Corp. to become the world’s No. 1 chip maker as it logged its biggest-ever quarterly revenue.
The semiconductor industry cashed in on a supply-crunch set off by the pandemic that wreaked havoc across global businesses, hampering production of everything from autos to refrigerators to smartphones. Demand exceeded supply throughout the past year, handing greater pricing power to chip companies such as Samsung and Intel.
The South Korean tech giant’s fourth-quarter results reflect the more favorable times. Net profit rose 64% to 10.84 trillion won, or the equivalent of about $9 billion, versus 6.6 trillion won a year earlier. The firm’s semiconductor division drove the performance.
The Suwon, South Korea-based company reported record sales of 76.57 trillion won for the quarter ended Dec. 31. That compares with about 61.6 trillion won from the year-earlier quarter.
Samsung’s performance slightly topped market expectations. Analysts polled by S&P Global Market Intelligence on average expected 10.7 trillion won in net profit and 75.5 trillion won in sales.
Samsung, the world’s largest maker of smartphones and televisions, is considered a tech industry bellwether, as a major electronics manufacturer and components supplier to companies such as like Apple Inc. and Sony Group Corp.
For the full year, Samsung’s net profit rose 51% to 39.9 trillion won, while revenue grew 18% to 279.6 trillion won.
Samsung’s standing as the top chipmaker by revenue comes as the semiconductor industry embarks on a spending spree to crank out more advanced chips and to expand capacity. Intel, which specializes in microprocessor chips that go into PCs and servers,had been No. 1 for nearly all of the past three decades,ceding the spot to Samsung only in 2017 and 2018 when memory-chip prices surged.
But last year proved particularly lucrative for Samsung’s business in memory chips, which have seen prices jump and are more ubiquitous across the digital world than Intel’s microprocessors. The South Korean firm’s semiconductor revenue for 2021 rose 29% year-over-year to 94.16 trillion won, or $78.4 billion.
That was enough to propel Samsung to the chip industry’s No. 1 by sales, according to Gartner Inc.,a tech market researcher.