Samsung Electronics reported third-quarter sales up 10 percent year-on-year to a record KRW 73.98 trillion, as continued strength in semiconductors and displays helped offset a drop in sales of smartphones and other consumer electronics. Operating profit rose 26 percent to KRW 15.82 trillion, helped by positive currency effects, and net profit increased to KRW 12.29 trillion from KRW 9.36 trillion a year ago.
The mobile and telecom business reported sales down 7 percent year-on-year to KRW 28.42 trillion, and operating profit dropped to KRW 3.36 trillion from KRW 4.45 trillion. Samsung said market conditions improved compared to the second quarter and smartphone sales were up on a sequential basis thanks to strong sales of flagship models including its new foldables and an enhanced mass-market lineup.
The increased marketing for the foldables however had some impact on profitability, and improving margins will be a focus for Q4, led by the new bespoke offerings. Samsung said smartphone demand should improve further on a quarterly basis due to the year-end holidays, but there remains some uncertainty about the impact of component shortages. For 2022, the company predicted further growth for smartphones and wearables, and said it will maintain the focus on premium segments like foldables and mass-market 5G phones in the replacement cycle.
For the semiconductor business, Samsung also sees a risk in Q4 of component shortages, rising raw material prices and ongoing Covid measures. However, underlying server and PC demand remains strong, and the company is working to benefit from the robust investment in IT, also at its foundry business. With its memory business the star performer, Samsung's semiconductor revenues jumped 40 percent year-on-year to KRW 26.41 trillion in Q3, and operating profit nearly doubled, to KRW 11.58 trillion from KRW 6.04 trillion a year ago.
At consumer electronics, Samsung's quarterly revenues were flat year-on-year at KRW 14.10 trillion, reflecting pent-up demand in the year-earlier period, the company said. Operating profit halved, to KRW 0.76 trillion from KRW 1.56 trillion due to growing costs for raw materials and logistics. While overall demand is expected to weaken going into 2022, Samsung is focusing on premium and bespoke products to uphold margins.
