FX.co ★ Samsung Q1 Profit Climbs

Samsung Electronics Co. Ltd announced a significant increase in their first quarter net income. This jumped from 1.40 trillion Korean won in the previous year to 6.62 trillion in the current year. The income attributable to shareholders of the parent company also saw a drastic increase within this period.

The operating income for the first quarter rose to 6.61 trillion won from the last year's 0.64 trillion. Several factors contributed to this profitability. Firstly, the Memory Business segment was able to return to profit by catering for the demand for higher value-added products. Substantial earnings were also recorded in the Mobile eXperience business and there was increased profitability in both the Visual Display and Digital Appliances businesses.

The first quarter saw sales grow to 71.92 trillion won, an increase from the previous year's 63.75 trillion. This growth was significantly influenced by the strong sales of the flagship Galaxy S24 smartphones and the rise in the prices for memory semiconductors.

The Memory Business bolstered its profits by achieving qualitative growth - successfully addressing the demand across varius platforms such as servers, storage, PC and mobile. Furthermore, it focused on high-value-added products like HBM, DDR5, server SSDs and UFS 4.0, and enjoyed an increase in the average selling price.

Forecast for the second quarter indicates that the industry is likely to remain steady, predominantly due to the demand for generative AI. Mobile demand is predicted to be stable in the quarter. However, the PC customers may experience slow seasonality, causing them to adjust their inventories in preparation for new product launches later in the year.

The second quarter is expected to see a drop in demand for smartphones due to seasonality. Consequently, the Mobile eXperience Business anticipates a decline in smartphone shipments, while maintaining consistent tablet shipments.

However, the second half of the year shows promise for a rebound in the smartphone market. This is due to factors such as stabilizing consumer sentiment, the expansion of AI products and services, and economic growth in emerging markets.

Moreover, by the second half of 2024, overall TV demand is expected to gradually recover. However, this comes with some uncertainty given the current macroeconomic and geopolitical environment.