Samsung Q1 2021 Sees Massive 44% Profit Jump Due to Strong Galaxy S21 Sales; Semiconductor Division Expects Drop

Urian B., Tech Times 07 April 2021, 01:04 am

(Photo : Screenshot From Marques Brownlee Official YouTube Channel) Samsung Q1 2021 Sees Massive 44% Profit Jump Due to Strong Galaxy S21 Sales while Semiconductor Division Expects Drop

Samsung Electronics has seen a significant rise in its operating income for Q1 of 2021. The massive jump has been reportedly backed by robust sales of the smartphones that would offset the lowered profits coming from the company's semiconductor division.

Samsung Q1 2021 Profits

In its recent earnings, per a Wednesday report in CNBC, the company noted that it initially expected an operating income of 9.3 trillion won or $8.3 billion USD and sales of 65 trillion won or $58 billion for the current quarter. This is a massive increase of 44.19% as well as 17.48%, respectively, in comparison to the year before.

According to ZDnet, the mobile division was the main leader in this growth and a large part of it is due to the recent Samsung Galaxy S21 series launch back in January. This occurred a month earlier compared to the flagship line's more usual release date. Samsung has also noted that the S21 is even selling faster in comparison to the S20.

South Korean Analysts on the Spike in Profits

According to South Korean analysts, it is expected that the mobile division could have contributed over 4 trillion won or over $3.5 billion to the company's operating income. The company's usual consumer electronics division, responsible for selling TV and appliances, is now also expected to have benefited from the continued pent-up demand coming from the pandemic during the current quarter.

Another Samsung division, the semiconductor division, is now expected to record its so far lowest profit in years. This is despite the massive global demand for chips. The division's total profitability was reportedly hampered by the significant costs of running its own facilities. These include the application of EUV or extreme ultraviolet and even experiencing the month-long halt of an important plant over in Austin, according to the analysts.

LG Quits Smartphone Business

As the total memory prices have increased, the semiconductor division is now expected to lead the pack in profits yet again this second quarter of 2021. Samsung is expected to announce the full earnings report for the current quarter coming at the end of the month.

While Samsung is leading in profits, LG, on the other hand, has announced that it will be quitting the smartphone industry due to struggles in making a profit. The company will be bidding goodbye to the smartphone industry and focusing more on other segments of its company.

LG is also popular for other appliances so the company plans to shift its resources towards the segments that actually turn in profits. The closing of its smartphone division is expected to take place on July 31, which is not a long way from now. Currently, the LG smartphone is preparing to close doors and consumers will no longer be able to buy new LG smartphones when they close.