Samsung Electronics Surpasses 70 Trillion Won in Quarterly Sales for the First Time (Comprehensive)

Q3 Revenue 73 Trillion Won... Highest Quarterly
Operating Profit Also 15.8 Trillion Won... Second Highest Ever
Driven by Semiconductors, Display, and Phones

[Asia Economy Reporter Kim Heung-soon] Samsung Electronics surpassed quarterly sales of 70 trillion won for the first time ever in the July-September period this year. This was the result of sustained demand for untact (contactless) services due to the prolonged COVID-19 pandemic, which kept prices of its mainstay memory semiconductors at a high level, and the newly released foldable phones creating a sensation in the smartphone market. Operating profit was the second highest ever.

Samsung Electronics announced on the 8th that its preliminary consolidated financial results for the third quarter showed sales of 73 trillion won and operating profit of 15.8 trillion won. Compared to the third quarter of last year, sales increased by 9.02% and operating profit by 27.94%, respectively.

This is the first time Samsung Electronics' quarterly sales have exceeded 70 trillion won. The previous record was 67 trillion won in the third quarter of last year. Operating profit was the best in 12 quarters since the semiconductor 'super cycle' boom in the third quarter of 2018 (17.57 trillion won).

Samsung Electronics did not disclose business segment results on this day, but securities firms estimate that the semiconductor division alone posted operating profit exceeding 10 trillion won in the third quarter. This is attributed to the peak in fixed transaction prices of memory products such as DRAM, boosted by the COVID-19 special demand, and improved profitability in the foundry (semiconductor contract manufacturing) division due to recent yield improvements and acquisition of new customers.

The display division is predicted to have earned about 1.5 trillion won in operating profit due to increased sales of small- and medium-sized OLEDs for smartphones, laptops, and tablets. The IT & Mobile (IM) division, responsible for the smartphone business, is estimated to have recorded operating profit between 3.5 trillion and 3.7 trillion won, driven by strong sales of new foldable phones such as the Galaxy Z Fold3 and Z Flip3.

On the other hand, the Consumer Electronics (CE) division, which handles home appliances and TVs, is expected to have operating profit of about 600 billion to 700 billion won, down from 1.06 trillion won in the second quarter, as the pent-up demand from last year has eased.

The outlook for the fourth quarter is not optimistic. It is analyzed that as vaccination rates increase and daily life returns, demand for PCs such as laptops and tablets will decline, and prices of memory products like DRAM will fall. However, securities firms expect Samsung Electronics to achieve solid annual results even considering the fourth quarter performance.

As of this day, the market estimates Samsung Electronics' annual sales at 280 trillion won and operating profit between 53 trillion and 54 trillion won. Last year's sales were about 236 trillion won, and operating profit was 36 trillion won.