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SAMSUNG: Q3 DRAM bit shipments hit a new high, and demand for smart phones is expected to be blocked in Q4


SAMSUNG announced its financial results for the third quarter ended September 30. Comprehensive revenue reached 73.98 trillion won (63.98 billion U.S. dollars), an increase of 10% year-on-year and 16.2% month-on-month; operating profit reached 15.82 trillion won (13.493 billion U.S. dollars). The month-on-month growth was 26% and the year-on-year growth was 28%; net profit reached 12.29 trillion won (10.483 billion U.S. dollars), a year-on-year increase of 31.3% and a month-on-month increase of 27.6%.

It is worth noting that due to the significant improvement in the DRAM business in the third quarter, the quarterly bit shipments hit a record high, the foundry and display businesses also enjoyed strong sales, and the finished product business also performed steadily. In addition, compared with Q2, most currencies in Q3 were against the Korean won. The stronger momentum has brought about 800 billion won of positive influence to the company. Under the combined influence, Samsung's comprehensive revenue in the third quarter reached a record high, and its operating profit also hit the second highest in history.

Divided by department

Revenue from the Consumer Electronics (CE) segment reached 14.10 trillion won (12.026 billion U.S. dollars), an increase of 5% from the previous quarter and a year-on-year increase of 0.1%. Despite its strong sales of high-end TVs and customized home appliances, the division’s operating profit fell quarter-on-quarter and year-on-year, only 0.76 trillion won (US$648 million) due to sharp increases in material and logistics costs.

The IT and mobile communications department (IM) has grown in sales of smartphones and smart wearables due to the strong sales of flagship models such as Galaxy Z Fold3 and Galaxy Z Flip3 and the enhancement of the mainstream market product lineup. The department’s revenue this quarter reached 28.42 trillion. South Korean won (24.240 billion U.S. dollars), an increase of 25% month-on-month, and a year-on-year decline of 7%, but due to increased marketing investment of foldable products, operating profit has some impact, operating profit eventually 3.36 trillion won (2.866 billion U.S. dollars).

Despite the uncertainty of the shortage of parts and components, the semiconductor sector has continued to grow in server demand and consumer PC demand has also been strong. The third quarter revenue reached 26.41 trillion won (22.525 billion U.S. dollars), an increase of 16% from the previous quarter. A year-on-year increase of 40%; among them, the storage department's revenue was 20.83 trillion won (17.766 billion US dollars), an increase of 17% month-on-month and an increase of 46% year-on-year.

For the Display Panel Division (DP), despite the weak performance of the large-scale display business, the sales of small and medium-sized OLED panels performed strongly. The third-quarter consolidated revenue of the division was 8.86 trillion won ($7.557 billion) and operating profit was 1.49 trillion won ( 1.271 billion US dollars).

Strong server demand in the third quarter, SAMSUNG DRAM bit shipments hit a record high, driving semiconductor operating profit to contribute more than 60%


Although the shortage of parts and the repeated epidemics during the third quarter hindered the assembly of finished products, with the release of new CPU processors in the first half of the year, demand for server applications continued to grow, and consumer PCs also showed strong demand due to changes in working models. In the smart phone market, due to new product releases and the base effect of the previous quarter, the recovery trend has become more apparent.

SAMSUNG said that through flexible product operations, the company actively responded to market demand and continuously increased the scale of advanced process production capacity to enhance cost competitiveness. SAMSUNG’s semiconductor division’s operating profit in the third quarter reached 10.06 trillion won ($8.580 billion), accounting for total operating profit. Over 60%.

Especially in the DRAM field, the current price situation is still favorable, and thanks to the significant increase in sales in the server field, DRAM bit shipments in the third quarter hit a record high, and revenue hit the second highest in history. On the other hand, due to SAMSUNG's expansion of 15nm DRAM production capacity, it continues to promote cost reductions.

In the NAND field, server SSD demand has gradually recovered as major customers' investment increases, and new CPU platforms have stimulated demand growth for high-capacity storage products. The smart phone sector is also in steady demand due to the launch of new models. On the supply side, Samsung has continuously increased its shipment share of 128-layer V-NAND.

In the LSI field, with the launch of new products by smartphone manufacturers in the third quarter, demand for SoC/DDI increased, the revenue of the system LSI business improved in the third quarter, and the industry’s first 200M pixel image sensor for mobile phones and the industry’s smallest Dual pixel image sensor.

In the field of foundry, due to the increase in the supply of key advanced process products, the revenue of the foundry business increased month-on-month, and revenue this quarter hit a record high.


Looking forward to the market development in the fourth quarter, SAMSUNG believes that due to the promotion of new CPUs and the expansion of data center investment, the basic demand for servers is expected to remain strong; smartphone manufacturers may continue to launch new 5G models, but there is a shortage of parts and customer inventory adjustments. May affect demand; PC market growth rate is expected to be consistent with the previous quarter.

Of course, the shortage of spare parts and customer inventory adjustments are the biggest uncertainties, and SAMSUNG also expressed continuous concern about this.

In the DRAM field, SAMSUNG said it will actively meet the needs of major server customers and PC demand; in the NAND field, the demand for high-capacity SSDs for servers is expected to be strong, and it will maintain differentiation by expanding the share of high-value products.

Regarding the prospects for next year, although the macro is facing uncertainties, such as the supply of parts and components, the implementation of epidemic prevention policies, and the cost of raw materials, it is difficult to provide specific guidance. However, with the introduction of new CPUs and the growth of corporate IT investment, PC demand is expected to perform strongly along with the trend of large-capacity, the penetration of 5G smartphones into the low-end and the low-end products, and the introduction of new products, the growth trend of shipments will remain unchanged.

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