Samsung last week uncovered its quarterly results. Profits continue to rise, reaching $ 6.4 billion this time around. This number is borne by consumer electronics, but especially by the mobile division. However, the lack of components could remove the company from the cloud.
Samsung phones are skyrocketing revenue
The company’s revenue for the quarter is nearly $ 59 billion, or 6% more than last quarter. Numbers driven by smartphone sales that exploded during the pandemic. “Smartphone sales rose quarter-on-quarter, supported by the launch of the Galaxy S21.”notes the South Korean company. In January, Samsung decided to launch the Galaxy S21 range, which was originally planned for March. A strategic decision that made it possible to increase the numbers. That equates to a 65% increase in profits for Samsung’s mobile division, or $ 4.39 billion.
Apple: an excellent first quarter thanks to the iPhone
If the company signs a good quarter thanks to the success achieved with the Galaxy S21, Apple, in turn, signs an excellent quarter thanks to the iPhone 12. Cupertino is increasingly ahead of the 5G smartphone market, dethroning Samsung. In fact, its market share for 5G has increased from 34.6% last year to 12.7% today. The South Korean giant is now behind Oppo or Vivo, whose sales have soared over the past year.
A semiconductor shortage that could affect Samsung as well
For a few months now, the semiconductor shortage has been felt in the smartphone space, including Qualcomm. In particular, LG had announced that it would be leaving the market in order to stock up on chips and differentiate itself from the competition. For its part, the South Korean giant has already been forced to abandon the Galaxy Note this year due to a lack of necessary components. This issue could continue to affect smartphone production and sales, which are expected to decline in the second quarter. “Due to the global shortage of semiconductors, production disruptions also occur with certain products and displays.”said Ben Suh, Samsung’s executive vice president of investor relations.
Even so, chip manufacturing profits are expected to increase for the company. In addition, prices for the two main types of chips, NAND flash memory and DRAM, of which it is the first manufacturer, are expected to rise in the spring of this year. As a result, the amount of its high-demand DRAM chips is expected to drop from 15% to 20%, said Sanjeev Rana, senior analyst at CLSA, an Asian brokerage firm. “We are currently rebalancing our global production.”said Ben Suh.
Although the company’s results exceeded analysts’ expectations, it remains to be seen what impact the semiconductor shortage will have on the production of Samsung smartphones. This could slow down and disrupt the global phone market, which grew 27% from the first quarter of last year.