To Enhance Competitiveness
Samsung Electronics announced on Oct. 28 that it would triple its foundry production capacity by 2026.
The company said it posted 73.98 trillion won in sales and 15.82 trillion won in operating profit on a consolidated basis in the third quarter of 2021. Its sales and operating profit swelled 10.48 percent and 28.04 percent, respectively, from a year before. If this trend continues, the Korean tech giant is expected to easily achieve the highest-ever annual business performance this year.
Semiconductors drove Samsung’s sales and earnings growth. The semiconductor business division alone racked up 10.6 trillion won in operating profit, accounting for 64 percent of the company’s total operating profit. Demand for DRAMs expanded, and the stabilization of ultra-micro fabrication lines lowered costs. Its foundry business is expected to renew quarterly sales records on the back of strong demand.
In the IT and mobile (IM) sector, foldable phones such as the Galaxy Z Fold 3 and the Z Flip 3 enjoyed strong popularity. Its display business showed good performances in small and medium OLED panels thanks to the launches of major smartphone models. The Consumer Electronics (CE) Business Division saw its profitability decline due to rising costs, despite strong sales of premium TVs and Bespoke home appliances.
The outlook for next year is unclear, especially for the memory semiconductor business. "Disruptions in appliance production has been extended much longer than expected due to problems in parts supply, increasing the uncertainties of the memory business," said Han Jin-man, vice president of Samsung Electronics. "Yet, we are not worried because the cycle of the memory industry is shorter and the fluctuation of memory prices is smaller than in the past and our inventory is small."
Samsung Electronics plans to greatly increase the competitiveness of its foundry business by tripling its production capacity through the establishment of a second foundry in the United States and the expansion of its Pyeongtaek plant in Korea.