Thanks for the memory: Samsung says DRAM, NAND profits up Q-on-Q, sales down as global supply chain bites

Expects more stability but warns of potential fab lockdowns on road ahead

Samsung blamed disruptions in the global supply chain for failing to meet its own guidance for DRAM and NAND shipments during final three months of 2021, nevertheless racked up a record quarterly sales at group level.

The South Korean megacorp said Q4 2021 delivered revenue of ₩76.57 trillion ($63.8bn), up 24 per cent year-on-year, and an operating profit of ₩13.87trn ($11.6bn), up almost 5 per cent.

Indicating the volatility in the sector, Semiconductor unit turnover was up 43 per cent year-on-year to ₩26.01trn ($21.6bn) but fell 2 per cent on the prior quarter. Similarly, the Memory division grew 44 per cent year-on-year to ₩19.45trn ($16.16bn), but fell 7 per cent sequentially.

Income from those businesses was ₩8.84trn ($7.47bn), up 5 per cent on the same quarter of 2020 and up 1.22 per cent sequentially.

On a call with financial analysts, Samsung waxed lyrical about the imbalance between supply and demand, something that has caused headaches for buyers and suppliers alike over the past several quarters.

When asked about the under-performance of its DRAM and NAND shipments, relative to forecasts, Samsung said it decided to steer clear of aggressive sales tactics, indicating protected profit over volumes.

"There were some downstream production disruptions due to the global supply chain issue, and this did have an impact on memory," the spokesperson said. He added Samsung was prepared for production impacts from a lockdown at semiconductor fab in Xi'an, China.

In its published report, Samsung says that memory demand remained solid, centred on servers, but revenue declined quarter-on-quarter due to a "one-off special incentive," and global supply chain issues.

In response to questions about memory pricing in the near future, another Samsung spokesperson said it was obviously difficult for the company to predict but expected the market would stabilise.

"There are still variables that could impact supply and demand this year, including at what pace the parts supply issue will be eased, the possibility of additional increase in raw materials and various geopolitical risks," the spokesperson said.

"But looking at the market, there are many factors that support a strong demand side. For example, there will be increased adoption of high core CPUs, launch of new CPUs that support DDR5 and also expected increase of IT investment by major companies."

This supports the view that there will be strong demand in the near future, according to Samsung, especially around servers.

Samsung said it invested ₩43.6 trillion ($36.3bn) in semiconductor manufacturing during 2021. For memory, it concentrated cap-ex on capacity expansions and process migrations at fabs in Pyeongtaek and Xi'an to address demand for advanced nodes, including EUV-based 15nm DRAM and sixth-generation V-NAND chips.

"Investments in memory increased year-on-year as we are at the lead of an inflection point in technology and are, thus, pre-emptively investing in application of next-generation technologies such as EUV," said Samsung's senior VP for Investor Relations, Ben Suh.

"We are executing the investments with a focus on technology leadership. And as a result, we can maintain an efficient investment level when considering our bit share from a mid-to long-term perspective," he added.

All other units in the electronics group expanded sales in the quarter, and you can read more here [PDF]. ®

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