Samsung profits surge as the world starts buying smartphones again

Huawei stockpiling components helps too, but server memory sales go soft

Samsung Electronics has revealed 50 percent growth thanks to a surge in smartphone sales.

The company today announced sales of KRW 66.96 trillion ($59bn) and profit of KRW 9.36 trillion won ($8.3 billion). The latter figure handily beat expectations and topped profits from last quarter, the same quarter in 2019 and indeed all quarterly profits since late 2018.

Samsung attributed its strong performance to the debut of new flagship handsets – that’d be the Galaxy Note20 and new folding phones – and “stronger sales of mass-market models in key regions including India.” Helping matters along was greater consumer confidence as the COVID-19 pandemic eased in some countries.

Huawei helped too: Samsung said a feature of this quarter’s DRAM sales was “inventory buildup from Huawei”. The Chinese company also splashed out on NAND.

PC-makers helped drive new demand for memory, but Samsung said sales of servers has slowed to below levels of demand experienced in the first half of the year. Might the big clouds have done all the scaling up they need to for now?

Entertainment products did well as punters decided that if they were stuck at home they might as well have new tellies to keep them occupied. Laundry equipment sold well because buyers are keenly interested in hygiene at this time.

Rival smartphone makers gave Samsung’s display business a boost and demand for PCs didn’t hurt display and memory sales.

The company predicted Q4 profits will fall amid “weakening memory chip demand from server customers and intensifying competition in mobile phones and consumer electronics.” Complicating matters is the need for Samsung to compete for the festive Dollar/Won/Pound/Triganic Pu.

Samsung’s plans to keep growing in 2021 include more foldable phones and mass-market 5G models. Cost-cutting that helped deliver the Q3 result will also continue.

The company has also spent up big to expand display manufacturing capacity and prepare to deliver more 5nm silicon. ®