Samsung Electronics posted better-than-expected sales of W60 trillion and an operating profit of W15.6 trillion for the first quarter of the year, according to preliminary performance results released Friday (US$1=W1,070).
The operating profit tops the record it just set in the previous quarter. Its operating margin of 26 percent is also a record high. But Samsung is increasingly dependent on semiconductors for its operating profit while its display and home appliance businesses are declining.
The semiconductor business is achieved an estimated operating profit of W11 trillion, just a quarter after it surpassed the W10 trillion mark for the first time. The proportion of semiconductors in total operating profit increased from 35 percent in 2014 to 65.6 percent in 2017 and is expected to reach 70 percent this year. Samsung ranks a distant first in the global DRAM and NAND flash markets with a share of over 40 percent in each.
It also performed better than expected in the smartphone market, where it is estimated to have earned W3 trillion, up more than W500 billion from the previous quarter.
But it performed poorly in the display sector. The LCD business was troubled by a glut of cheap Chinese products, and the OLED business suffered a loss of about W1 trillion as Apple, its main customer, diversified suppliers. It also posted an operating profit of only about W300 billion in TV and home appliances because of slow seasonal demand.
There are other problems. The conglomerate has been under pressure to compensate leukemia victims who used to work at a semiconductor plant and make public an environmental assessment report of its plants.
De facto chief Lee Jae-yong has just been sprung from jail on probation after being found guilty of bribing ex-President Park Geun-hye, and the group remains under investigation for its role in the corruption scandal involving her predecessor Lee Myung-bak. It is also suspected of sabotaging the establishment of labor unions at affiliates.
