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Samsung aiming for dominance with 5G

by on27 January 2022

Memory chips rebounded

Samsung aims to win a bigger share of the smartphone market this year with more 5G-capable models and pointed to a price rebound for its flagship memory chips as early as the first half.

The world's largest memory chip and smartphone maker forecast a recovery in global tech device demand after reporting its best fourth-quarter profit in four years, although it cautioned about ongoing challenges from supply chain issues and COVID-19.

Samsung VP Kim Sung-koo said next-generation 5G smartphones will account for more than half of smartphone sales in the market in 2022.

"Our strategy in the mass tier is to actively capture demand from people seeking to replace their phones with 5G models," Kim said.

If what he says pans out, Samsung, which has around 20 per cent of the global smartphone market, will go head to head against low-cost Chinese smartphone rivals like Xiaomi, OPPO and Vivo in markets outside China.

The South Korean tech giant was cautiously upbeat on the possibility of a turnaround in the price of DRAM chips, widely used in data centres and tech devices.

The splendidly named memory chip VP Han Jin-man said: "We expect strong fundamental demand centering around servers, and solid mobile demand from expansion of 5G models."

"Some organisations have forecast DRAM prices could reverse in the first half. We think this is a possible scenario," he added.

The price of DRAM chips dipped 9.5 per cent in the fourth quarter from the previous quarter, TrendForce data showed, and analysts expect a further drop in the current quarter

For non-memory chips, Samsung said supply was expected to remain tight due to increased take-up of 5G-capable devices, demand for high performance computing, increased outsourcing from chip design and manufacturing firms, and continued inventory demand.

The company spent 90 per cent of its 2021 annual capital expenditure of $40.1 billion in the chip business.

Samsung posted a 53 per cent rise in fourth-quarter operating profit to $11.6 billion. Profits at its chip business, its largest division, more than doubled from the same quarter a year ago.

Analysts moaned that the profits were lower than the market had expected due to conservative shipments of memory chips, R&D costs and one-off year-end bonuses.
Samsung said it came in below its initial guidance for memory chip shipments after deciding not to push aggressively to expand sales, signalling a push to prioritise profits over volume.

Operating profit at Samsung's mobile business rose about 9.9 per cent. Net profit rose 64 per cent and Revenue rose 24 per cent.


Last modified on 27 January 2022
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