On a consolidated basis, Samsung Electronics announced its fourth quarter 2020 results with sales of 61.55 trillion won and operating profit of 9.05 trillion won.
In 2020, it recorded sales of 236.81 trillion won and operating profit of 35.99 trillion won.
Sales in the fourth quarter decreased 8.1% QoQ due to intensifying competition for set products and a decline in memory prices. It recorded 61.55 trillion won. Compared to the same period of the previous year, it increased 2.8% due to improved parts demand.
Operating profit was due to a decline in memory prices, a decrease in sales of the set business, an increase in marketing expenses, and negative exchange rates. It recorded 9.05 trillion won, down 3.3 trillion won from the previous quarter, and the operating margin also fell to 14.7%.
Compared to the same period of the previous year, both operating profit and margin increased due to the improvement in the display and memory market conditions.
The demand for memory semiconductors was solid, mainly for mobile and consumer applications, but the average selling price (ASP) was It continued to decline, and earnings declined due to negative FX effects and initial costs related to mass production of new lines.
System semiconductor orders from major global customers increased, but due to the weak dollar Earnings decreased compared to the previous quarter and the same period last year.
DP (Display Panel) has significantly increased the utilization rate of small and medium-sized panels and improved the large panel market. Earnings improved significantly compared to the previous quarter and the same period last year.
For wireless, sales profit declined due to intensifying competition at the end of the year and increased marketing costs, but efforts to improve cost structure The company continued to maintain the solid double-digit operating margin of the previous year.
The network’s performance improved thanks to response to domestic 5G expansion and expansion of overseas 4G and 5G sales.
CE continued to show strong sales in advanced markets during the peak season at the end of the year. Profitability has slowed due to rising costs.
Regarding the welcome direction in the fourth quarter, most of the currencies in the dollar and euro and major emerging markets It was significantly weaker than the won, and had a negative impact of about 1.4 trillion won compared to the previous quarter, mainly for the parts business.
[1분기 전망]
In the first quarter, wireless performance is expected due to the early release of the’Galaxy S21′, but memory and display Company-wide profitability is expected to decline due to deteriorating parts business performance.
Despite the continued recovery of mobile demand and data center demand, memory Earnings are expected to decline due to the initial cost of new lines.
System LSI is a flagship smartphone SoC (System on Chip), CIS (CMOS Image Sensor), DDI (Display Driver IC) After expanding supply, the foundry plans to expand production of EUV 5nm SoC and 8nm High Performance Computing (HPC) chips.
DP is expected to significantly deteriorate QoQ in the case of small and medium-sized panels. Compared to the same period of the previous year, the adoption of OLEDs is expected to increase, leading to improved performance.
In the case of large-sized panels, we will continue to transform the business structure based on QD technology.
Wireless earnings are expected to improve thanks to increased sales of flagship products such as the’Galaxy S21′ and the launch of new mid- to low-end models.
CE sales are expected to slow down amid the seasonal off-peak season, but due to timely launch of new products and expansion of premium product sales Solid earnings are expected.
[2021년 전망]
This year, there are always risks such as the re-proliferation of Corona 19, but global demand is expected to recover.
Memory semiconductor industry is expected to recover in the first half due to solid demand for mobile and server. Global economic uncertainties such as exchange rates are also expected.
Samsung Electronics is promoting the acceleration of the conversion of 1z nano DRAM and 6th generation V-NAND while expanding EUV application. It plans to improve cost competitiveness and market leadership.
System LSI is actively responding to the 5G SoC and high-pixel sensor market with differentiated products, The foundry plans to accelerate its growth by expanding mass production of EUV 5 nanometers and diversifying applications.
In the case of small and medium-sized panels, DP continues to improve technology differentiation and price competitiveness. In the case of large-sized panels, it plans to focus on building the foundation, such as timely development of QD displays.
Wireless strengthens flagship products such as’Galaxy S21′ and foldable smartphones, as well as mid- to low-end 5G lineup. While expanding smartphone sales, the company plans to improve profitability by improving the cost structure.
The network plans to continuously strengthen its global 5G business by expanding new orders.
CE is expanding premium products such as’Neo QLED’,’Micro LED’, and Bespoke home appliances. While improving marketing efficiency and strengthening online sales, global SCM (Supply Chain Management) capabilities Based on this, it will establish a stable supply chain and promote sustainable growth.
[시설투자]
In 2020, facility investment is about 38.5 trillion won, and by business, it is about 32.9 trillion won for semiconductors and 3.9 trillion won for displays.
In memory, investment has increased due to the conversion and expansion of advanced processes to respond to the increasing demand in the future. The foundry also increased significantly compared to the previous year due to investments in capacity expansion such as the EUV 5-nano process.
Display also focuses on expanding QD display production capacity (CAPA) and small and medium-sized new technology processes Investment increased compared to the previous year.
[부문별 세부 내용]
□ Semiconductor
Semiconductors recorded 18.18 trillion won in sales and 3.85 trillion won in operating profit in the fourth quarter of last year.
In the memory business, the mobile market showed a strong rise in the fourth quarter, and the data center and PC markets were also on the rise. Demand was solid as it was good.
However, earnings weakened due to continued price declines, a weak dollar, and initial costs for new lines.
In the fourth quarter, DRAM sales recovery, data center investment expansion, strong PC demand, new GPU release, etc. There was solid demand due to the impact.
Demand for NAND was solid in mobile and consumer SSDs, but server sales in the first half In the fourth quarter, demand was somewhat weak.
In the first quarter of this year, the mobile market expanded in earnest due to the release of various new products. Increased demand for data center purchases, increased demand for laptops for non-face-to-face activities Overall, demand is expected to improve. However, due to the weak dollar and the initial cost of new lines Earnings are expected to weaken QoQ.
Samsung Electronics has expanded the proportion of 1z-nano for DRAM and timely sales, and accelerated the conversion of NAND to 6G V-NAND. It plans to promote cost competitiveness and strengthen market leadership.
This year, it is expected to gradually escape from the effects of Corona 19 and find a growth engine.
In mobile, the amount of memory installed is due to the increase in Chinese demand and the spread of 5G mid-to-low price models. It is expected to continue to rise, and server investments in data centers resume and new CPUs are released. Demand is expected to remain solid.
However, the speed of economic recovery is unclear, the weak dollar, initial costs due to the creation of new lines, etc. There are still various uncertainties.
Samsung Electronics responds to demand fluctuations through flexible product operation, The world’s first multi-step EUV applied 1a nano DRAM and 7th generation V NAND, etc. It will lead the next generation lineup.
The system LSI business is based on mobile DDI and Demand for image sensor products increased, but earnings declined due to negative welcome.
However, it laid a foothold for customer expansion by releasing the first 5-nano SoC product,’Exynos 1080′.
This year, the market is expected to recover due to the release of new 5G products and increasing demand by major smartphone makers. It plans to promote double-digit growth in sales of the division by promoting supply expansion centered on 5G SoCs and sensors.
The foundry business was driven by increasing demand for 5G mobile chips, sensors, and HPC chips in the fourth quarter. The company’s sales hit the highest quarterly sales, but earnings declined due to the weak dollar.
However, Samsung Electronics completed the design of the 5nm 2nd and 4nm 1st generation mobile products in a timely manner. It has proven competitiveness in advanced processes.
In the first quarter of this year, the demand for all processes is strong and the supply shortage problem is expected to persist for the time being. Is expected, while Samsung Electronics operates the line flexibly, It plans to focus on the development of the first and second generation of 3 nanometers, which are advanced processes.
In 2021, the foundry market is expected to continue growing due to the acceleration of 5G penetration and strong demand for HPC. Samsung Electronics plans to secure the basis for future growth by increasing the production of high-tech processes and expanding the proportion of global customers.
□ Display Panel
In the display business, it recorded sales of 9.96 trillion won and operating profit of 1.75 trillion won in the fourth quarter.
The display business in the fourth quarter achieved the highest quarterly performance due to recovery in demand for major products such as smartphones and TVs.
For small and medium-sized displays, performance improved significantly compared to the previous quarter due to strong demand from major customers. For large displays, demand for TV and monitor panels continues due to the expansion of non-face-to-face services. The average panel selling price also increased, reducing the QoQ deficit.
The small and medium-sized display business in the first quarter of this year compared to the previous quarter due to a decrease in demand from major customers Although earnings are expected to decline, as major customers’ OLED adoption models increase The utilization rate is expected to improve YoY.
The large display business is preparing for timely launch of QD display products, We plan to respond to LCD demands of some customers without any problems.
This year’s small and medium-sized display business is driven by a full-scale expansion of the 5G smartphone market and a recovery in demand for smartphones. OLED panel demand is expected to increase.
Samsung Electronics is striving to expand new applications such as notebook PCs and tablets, while expanding the market for innovative products such as foldables. In preparation for full-fledged growth, the company plans to improve technology completion and cost competitiveness.
In the large display business, we develop differentiated technology QD displays in a timely manner, It plans to build a premium market base through customer diversification.
□ IM (IT & Mobile Communications)
In the fourth quarter, the IM division recorded sales of 22.34 trillion won and operating profit of 2.42 trillion won.
The mobile market in the fourth quarter was affected by the year-end peak season and a gradual market recovery.Demand is expected to increase QoQ.
In the wireless business, sales and profits declined compared to the previous quarter due to intensifying competition at the end of the year and increasing marketing expenses. We maintained a double-digit operating margin by continuing to improve our cost structure, such as standardizing parts.
The network business responds to domestic 5G expansion and expands 4G and 5G business in overseas markets such as North America. Earnings improved compared to the previous quarter.
In the first quarter of this year, the mobile market entered a low-demand season, and demand for smartphones and tablets increased. It is expected to decrease QoQ.
However, in the wireless business, the expansion of flagship sales due to the early launch of the’Galaxy S21′ Both sales and profit are expected to increase QoQ thanks to an increase in average selling prices and the launch of new mid- to low-end models.
The network business plans to continue expanding business centering on overseas operators such as North America and Japan.
This year, as the 5G market expands in earnest along with a gradual economic recovery, Market demand is expected to recover to the level before Corona 19.
The wireless business maximizes sales of the’Galaxy S21′, and the’Galaxy Z Fold’,’Galaxy Z Flip’ and It plans to promote the popularization of the same foldable category to solidify its leadership in the premium market.
In addition, while promoting the expansion of smartphone sales by reinforcing the competitive mid- and low-priced 5G lineup, The company plans to continue to strengthen the foundation for business growth such as tablets and wearables.
In addition, through cooperation with global partners, the Galaxy ecosystem It plans to continue its efforts to achieve solid profitability, such as improving cost structure and improving operational efficiency.
The network business plans to actively expand new business while responding to the commercialization of 5G at home and abroad.
□ CE (Consumer Electronics)
The CE division recorded sales of 13.61 trillion won and operating profit of 0.82 trillion won in the fourth quarter.
The TV market in the fourth quarter expanded QoQ due to strong demand for pent-ups centered on advanced markets during the peak season at the end of the year.
Samsung Electronics preemptively responded to demand during peak season through non-face-to-face sales competitiveness that has been continuously strengthened. Online sales and O2O (Online to Offline) services were expanded.
As a result, sales expanded to focus on high value-added products such as QLED, ultra-large, and gaming monitors. Earnings slowed slightly compared to the previous year due to intensifying competition and rising costs during the peak season.
The consumer electronics market also saw a slight increase in demand as economic activity in emerging markets gradually resumed.
Samsung Electronics’ sales grew from the previous quarter in both developed and emerging markets. Focusing on the operation of flexible peak season promotions and premium product sales by region Profitability also improved from the previous year.
The TV market in the first quarter of this year was seasonally off-demand, and demand decreased compared to the previous quarter. Growth is expected compared to the same period last year.
Samsung Electronics offers various promotions by country through close pre-cooperation with distribution. It plans to expand and maximize sales opportunities.
In addition,’Neo QLED’ has been successfully released, and It will focus on securing growth and profitability by accelerating the improvement of its sales structure, focusing on high value-added products.
Global home appliance demand in the first quarter is expected to grow year-on-year, and Samsung Electronics It plans to continue its growth by launching innovative premium new products and strengthening online marketing activities.
Is the TV market expected to be highly volatile this year due to the impact of Corona 19? The overall market is forecast to be the same as the previous year.
Samsung Electronics is flexible with market changes based on global SCM competitiveness and business experience. We plan to continue to promote growth by establishing a sales strategy that can respond.
In addition, with’Neo QLED’,’Micro LED’, which opens a new era of image quality, And’The Frame’, which was reborn with a slimmer design, etc. It plans to deliver a better viewing experience to consumers by expanding sales of premium products.
This year’s home appliance market is expected to grow year-on-year due to continued demand for pent-ups centered on advanced markets.
Samsung Electronics is expanding its premium product’BESPOKE’ platform to other product categories, It plans to continue to grow premium sales based on its global SCM capabilities.
[ESG(환경∙사회∙지배구조) 등]
Samsung Electronics is doing its best to improve business competitiveness and create environmental and social values. Many efforts are also being made to strengthen the governance of sustainable management.
Samsung Electronics has established the Sustainability Management Council, a company-wide consultative body that discusses the company’s sustainability management strategy. It was upgraded to the CFO supervision so that sustainability management could be reflected in a higher ranking in the overall management decision-making process.
In addition, the Sustainability Management Secretariat, which has been operated under the existing management support office, is used as a sustainability management promotion center directly under the CEO.Upgraded and strengthened its role as a control tower for company-wide sustainability management. Established the Sustainability Management Office to cover the entire life cycle from product planning to R&D, marketing, and AS. We have implemented sustainability in our products and services.
Samsung Electronics plans to continue strengthening its ESG response in the future to solidify the foundation for sustainable management.
□ Samsung Electronics 2017-2020 4th quarter quarterly performance (Unit: KRW trillion)
※ CE (Consumer Electronics), IM (IT & Mobile Communications), DS (Device Solutions), DP (Display Panel)
※ Sales and operating profit for each business group were prepared based on the organization in 2020, and the sales for each division includes internal sales between divisions.
※ The CE division includes the medical device business division from ’20
※ Harman’s sales and operating profits are based on the fiscal year of Samsung Electronics, and the acquisition-related expenses are reflected.
(The first quarter of 2017 is the results after March 11, when the acquisition process was completed)