- Looking ahead to the second quarter, Samsung Electronics expects the memory business to remain solid
- The company informed that earnings from OLED screens are likely to be weaker due to a stagnant smartphone market
Samsung Electronics has reported financial results for the first quarter that ended on 31 March 2020. The company’s total revenue was KRW 55.33 trillion, a decrease of 7.6 per cent from the previous quarter mainly due to weak seasonality for the its display business and consumer Electronics Division and partially due to effects of COVID-19. From a year earlier, revenue rose 5.6 per cent due to increasing demand for server and mobile components.
“Operating profit was lower by KRW 0.7 trillion quarter-on-quarter to KRW 6.45 trillion, affected by the same factors that weighed on revenue with a corresponding decrease in operating margin, even though memory earnings were higher. Compared with a year earlier, operating profit increased by KRW 0.2 trillion with an improved product mix in the mobile business and additional diversification of the Company’s customer base in mobile OLED,” read Samsung’s official statement.
Samsung’s semiconductor earnings improve
Samsung’s semiconductor businesses posted KRW 17.64 trillion in consolidated revenue and KRW 3.99 trillion in operating profit in the first quarter.
The company it saw good demand of DRAM for datacenters. For mobile, decrease in set demand due to effects of COVID-19 and seasonality was offset by expanded adoption of high-density products by major customers. For PC, demand remained steady on the back of the increase in virtual meetings.
“For NAND, mobile demand was relatively solid due to the expansion of products from major customers adopting high-density storage greater than 128GB. Demand for server SSD, mainly for datacenters, continued to grow alongside rising demand for high-volume content,” Samsung informed.
The company said that it will start mass-producing 5nm products this year and focus on the development of GAA 3nm process.
Samsung’s display earnings decline
Samsung’s display panel business posted KRW 6.59 trillion in consolidated revenue and KRW 0.29 trillion in operating loss for the first quarter. It posted an operating loss due to sales decline of mobile displays.
“Mobile display earnings saw a profit decline because of slower sales and lower fab utilization amid weak seasonality. For large displays, the operating loss narrowed, helped by short-term market factors including a smaller drop in ASP and favorable foreign exchange movements,” read Samsung’s official statement.
Looking ahead to the second quarter, Samsung expects a further drop in mobile display earnings due to falling demand in the US and Europe, driven by the impact from COVID-19.
