Samsung has just announced operating profits up 25.7% for the last quarter of 2020. Despite the economic and health crisis, the South Korean giant earned 9 trillion won, or 6.7 billion euros, within three months. The Seoul giant has notably benefited from the strong demand for chips. In 2020, the group recorded a 30% increase in profits.
This Friday, January 8, 2021, Samsung announced its preliminary financial results for the fourth quarter of 2020. Over the period, the smartphone leader earned 9 trillion won, up 25.7% from the last quarter of late 2019 (7,160 billion).
This is, however, less than in the third quarter of 2020 (9360 billion won). Note that analysts expected profits slightly higher than those announced by Samsung (9340 billion). The manufacturer will not reveal all of its results until the end of the month.
On the same topic: Smartphone production fell 11% in 2020, Samsung leading and Huawei lagging behind
Samsung is saved by high demand for chips
On the strength of these encouraging quarterly results, Samsung displays a 30% increase in profits over the whole of 2020. Despite the pandemic and the containment measures, the Seoul giant is said to have amassed 36 trillion won last year, or 27 billion euros.
Samsung does not owe these prodigious results to its smartphone division, which has lagged behind for several years. In 2020, Samsung only sold 270 million smartphones worldwide. This is the first time since 2011 that the South Korean group has sold no more than 300 million mobile terminals. Despite these sluggish sales, Samsung remains the world number 1 in the mobile market, ahead of Apple.
Samsung’s financial results are rather inflated by the strong demand for DRAM memory chips. As telecommuting has become the new normal, businesses face a real shortage of chips globally. Under these conditions, the selling price of these components exploded. Samsung, the world’s largest memory chip maker, has logically taken advantage of the situation. This is not the first time that the firm’s financial results have depended on the vagaries of the DRAM chip market.