Its fourth-quarter net profit rose 26 percent on Thursday, as the world’s largest smartphone maker and memory chips increased demand for its products amid the Corona virus epidemic.
But as the new year approaches, the South Korean tech giant faces additional challenges. Aside from the epidemic, the company is fighting to get behind the bars of its de facto leader, Lee Jae-young. And its competitors, for handsets and semiconductor conductors, are getting stronger and bigger.
Samsung won 6.61 trillion South Korean won, or about $6 billion, in the quarter ended December 31, up from 5.23 trillion won last year. Revenue rose to 61.55 trillion won from 59.88 trillion won the following year.
S&P Global Market Intelligence estimates analysts forecast 6.74 trillion won in net profit and 61.21 trillion won in revenue.
Like other technology companies, Samsung has performed well in the epidemic on the strength of consumer demand for most electronics, although economic pressures have squeezed smartphone sales in the first half of last year. The company is closely watched in the world of technology, as a major manufacturer of instruments and computing devices, as well as a leading supplier to other electronics firms.
The company warned of lower-than-expected earnings in the first quarter of 2021, although it indicated growth was expected in the first half of the new year.
In handsets, Samsung recovered most of the dents created by the closure of the epidemic fuel store early last year. Just two weeks ago, the company launched its latest flagship phone, the Galaxy S21, at a significant discount over previous years, seeking market share from Huawei Technologies while Chinese sanctions were imposed. Due to the chip is disconnected from the supply.
But the release of Samsung, which has been pushing the window to sell the company’s latest offerings for more than a month, is the company’s most aggressive move in recent years and indicates that the smartphone’s Continuing the epidemic upon recovery, said Van Lam. Market Researcher, Senior Director Research at CCS Insight.
“You can look at history again. They’ve only been raising prices and the overall price of the phone,” Mr. Lam said. “Now he’s giving himself a haircut.”
The smartphone market could change even more to benefit Samsung – or other competitors, if LG Electronics sells its smartphone division, which has been bleeding for almost six years. Seoul-based LG is a major competitor to the US market, although it has lost ground this month against Samsung and Apple Inc., LG’s chief executive told employees he is looking forward to the future of the unit. ” Leaving all possibilities open. ”
Samsung’s memory division saw a drop in prices in the fourth quarter as demand for servers and cloud computing centers increased, with a strong Korean earnings. But industry analysts say memory prices are likely to rise again in the first half of 2021, especially amid global chip shortages and growing demand from sectors such as the automotive industry.
Samsung is also considering long-term investments to accelerate its chip manufacturing, as competitors have grown stronger in recent months. The Wall Street Journal reported last week that it was examining locations in Arizona, Texas or New York where it could invest as much as 17 billion.
But big moves at Samsung are now in a new crisis as officially Samsung’s vice chairman, Mr. Lee, has returned to prison after a trial for bribing the former South Korean president. Mr. Lee and his lawyers on Monday refused to appeal the decision, which sentenced him to one and a half years in prison for acting prematurely.
In an internal Tuesday message published by Samsung’s three CEOs, Mr. Lee apologized for “causing trouble” and told employees to “invest, create jobs and make ends meet.” Keep working for ” [Samsung’s] Social responsibilities.