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Source: Financial Network
2020-04-30 17:54
On April 29, Samsung Electronics released its first quarter financial report. Data shows that the company made a net profit of 4.89 trillion won (about $ 4 billion) in the first fiscal quarter, down 3.1% from the same period last year.
In addition, Samsung’s total revenue for the first quarter was 55.3 trillion won (approximately US $ 45 billion), a decrease of 7.6% from the previous quarter, primarily due to weak seasonal revenue in the screen sector and the consumer electronics sector.
Affected by the new coronavirus epidemic, domestic and foreign panel makers were pressured by sales. Samsung’s display panel business had a consolidated revenue of 6.59 trillion won (approximately US $ 5.4 billion) in the first quarter and an operating loss of 0.29 trillion won (approximately 240 million) USD). Samsung said the reduction in demand for mobile device panels was the main reason for the loss, but the loss of the large panel business has been reduced.
Currently, Samsung has decided to “break the arm” of the LCD industry by the end of 2020, fully develop QLED panels and OLED displays, and realize the concentration of the industry. In the current situation where LCD screens are gradually being sidelined, Chinese companies BOE and Huaxing Optoelectronics are expected to succeed at Samsung to win this market.
The performance of the consumer electronics sector has not improved significantly. Samsung’s consumer electronics sector posted 10.3 trillion won (approximately $ 8.4 billion) in consolidated revenue and 0.45 trillion won (approximately $ 370 million) in operating profit in the first quarter. The entire appliance industry is in the worst recession stage in the history of industrial development. Prior to this, the relevant companies in the Hisense and Haier industrial chain were rumored to fire their employees in order to survive. Gree and other companies have started live streaming business, proving that the industry is oversupplied and fierce. Samsung specifically noted that the cancellation of major world sporting events and the postponement of the Summer Olympics, consumer demand is weak and TV sales are expected to decline.
In this financial report, the business of mobile communication is the biggest bright spot. In the first quarter, Samsung’s IT and mobile communications departments posted consolidated revenues of 26 trillion won (approximately $ 21.3 billion) and operating profit of 2.65 trillion won (approximately $ 2.2 billion). Despite weak sales at the end of the first quarter, earnings have increased compared to the same period. The increase in profits lies in the reduction of marketing expenses, which benefits more with the launch of the flagship Galaxy S20 series.
In fact, in view of South Korea’s emphasis on 5G, Samsung has also invested heavily in 5G technology. Previously, the German Federal Ministry for Economic Affairs and Energy published the latest 5G industry patent report jointly investigated by internationally renowned patent data company IPLytics and the Berlin University of Technology. According to the report data, as of January 2020, there were 95,526 global 5G patent declarations and 21,571 5G patent families were declared. Among them, Huawei ranked first with 3,147 families, followed by Samsung 2,795 families.
South Korea has also become the first country to market 5G. In early April, the number of 5G users reached 5.77 million and the penetration rate was close to 10%. Strong demand for “base camp” helped sales of the Samsung S20 series to some extent.
On April 29, the latest investigation by market research agency Strategy Analytics, the global shipment of 5G smartphones increased to more than 24 million units in the first quarter of 2020. Samsung ranked first with 8.3 million units shipped. However, although the S20 series is selling well in Europe, America, India and other markets, Samsung has not yet entered the right path in the Chinese mobile phone market. Strategy Analytics pointed out that 5G mobile phones in the Chinese market are out Products are mainly from national manufacturers, in this list closely follow Huawei (8 million units), vivo (2.9 million units) and Xiaomi ( 2.5 million units).
To continue to boost morale on 5G mobile phone sales, Samsung will partner with South Korean operator SK Telecom to launch the world’s first GALAXY Quantum quantum encryption smartphone in May. Based on the Samsung A71 5G, this mobile phone is equipped with a Quantum Random Number Generation (QRNG) chip developed by SK Telecom to ensure credible authentication and encryption of confidential user information and effectively prevent attacks by hackers . Additionally, to deal with the uncertainty caused by the epidemic, Samsung Mobile has launched an official website consulting service to help relevant partners conduct business in extraordinary times.
Finally, in the semiconductor business, under the epidemic, thanks to strong demand for servers and personal computers, the demand for related mobile devices remained stable and revenues from memory businesses like DRAM and NAND FLASH improved. First quarter comprehensive income was 174,400 100 million won (around 14.4 trillion US dollars), operating profit is 3.99 trillion won (around 3,267 trillion dollars).
It is worth mentioning that, in terms of chip foundry, Samsung said the second quarter goal is to expand the EUV leadership position and start mass production of the 5nm process. Looking at the global foundry industry, many semiconductor companies with manufacturing capabilities in Texas, including Texas Instruments, gradually faded away due to competition. Currently TSMC, Samsung, SMIC and other bosses are still competing for orders. In recent years, Samsung has been struggling to catch up with TSMC, trying to compete for big clients like Qualcomm, Nvidia, Apple, etc. At the same time, it also means that mobile semiconductor technology has officially entered the 5nm era.
