Flagship Smartphone New Release Effect
Annual Operating Profit Decreases by 46%
Samsung Electro-Mechanics' operating profit in the fourth quarter of last year showed a slight increase compared to the same period of the previous year. The launch of new smartphone models had an impact.
Samsung Electro-Mechanics announced on the 31st that its consolidated sales in the fourth quarter of last year increased by 17.2% year-on-year to KRW 2.3062 trillion, and operating profit rose by 9.1% to KRW 110.4 billion on a preliminary basis.
Due to the launch of new smartphone models, the supply of high-performance modules such as multilayer ceramic capacitors (MLCC) for smartphones and folded zoom increased, resulting in higher operating profit compared to the same period last year. However, operating profit decreased by 40% compared to the previous quarter due to seasonal off-season effects such as year-end inventory adjustments.
Last year's annual sales recorded KRW 8.9094 trillion, down 5.5% from the previous year, and operating profit was KRW 639.4 billion, down 45.9%.
Looking at the fourth quarter performance by segment, the Component division recorded sales of KRW 975.1 billion, up 17% from the same period last year. Sales of related MLCCs increased due to new smartphone launches by overseas clients.
The Optical Communication Solutions division achieved sales of KRW 888.4 billion, up 36% from the previous year. Sales increased as supply expanded to domestic and overseas customers of new structure applied high-definition folded zoom and high-pixel camera modules for autonomous driving.
The Package Solutions division's sales were KRW 442.7 billion, down 8% from the same period last year. Sales declined due to reduced demand caused by year-end inventory adjustments.
Samsung Electro-Mechanics expects demand for IT devices such as smartphones and PCs, as well as industrial products like servers, to recover this year. The trend toward automotive electronics (electric and electronic equipment for vehicles) is also expected to expand.
Accordingly, Samsung Electro-Mechanics plans to strengthen competitiveness in high value-added MLCC packages and substrates for IT use and increase supply. It also plans to increase supply of products related to growth areas such as automotive electronics and AI for servers.
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