In the first quarter, Samsung expects its mobile business to improve its earnings, led by an increase in sales of flagship products with the launch of Galaxy S9. Driven by component business, the company posted KRW 65.98 trillion in consolidated revenue and KRW 15.15 trillion in operating profit for the fourth quarter of 2017.
Overall, Samsung reported full-year revenue of KRW 239.58 trillion and full-year operating profit of KRW 53.65 trillion.
‘The earnings in the mobile business declined due to a hike in marketing costs under strong seasonality. Total smartphone shipments decreased due to the lineup optimisation of low-end models, while shipments of flagship products, such as the Galaxy Note 8, increased from the previous quarter,’ the company said in the earnings report.
The Display Panel business, which manufactures OLED and LCD screens, saw increased shipments of OLED panels for premium smartphones, but profitability for LCD panels decreased due to weak seasonality, dampening sales and average selling prices.
As indicated in Samsung’s preliminary earnings announcement in early January, operating profit was affected by the appreciation of the Korean Won against the US dollar and other major currencies, with the impact amounting to approximately KRW 660 billion quarter-on-quarter.
Samsung expects TV business to be affected by weak seasonality, but the company is aiming to be profitable by expanding sales of premium products and pushing for an early release of new models.
‘In 2018, demand for NAND is likely to remain strong and market conditions are forecast to be stable. Samsung will expand 64-layer V-NAND production mainly at its Pyeongtaek plant. As for DRAM, the company expects solid demand growth due to new data centre builds and will increase product competitiveness by expanding 10nm-class process migration. As for Foundry, Samsung will lead the technological process leadership with a risk production of 7-nano,’ the report added.
For the Display Panel business in 2018, the company expects OLED to become a mainstream panel in the smartphone industry and will reinforce its competencies in new applications such as foldable, automotive and IT displays. In the case of LCD panels, it will focus on meeting the market’s needs for ultra large and high-resolution TVs and strengthening partnerships with strategic customers.
For the mobile division in 2018, the company will aim to increase its earnings by increasing sales of premium products and maintaining profitability of mid-range to low-end products. Samsung will continue its efforts to differentiate its smartphones by adopting cutting-edge technologies, such as foldable OLED displays. It will also drive forward new businesses related to AI/IoT by strengthening the ecosystem based on Bixby and building on Samsung’s 5G technology.