Galaxy S22 helped Samsung's profits skyrocket in the first quarter of this year

Samsung on Thursday reported a 51% increase in operating profit from a year ago, helped by strong smartphone sales and record quarterly earnings from its chip division.

The South Korean tech giant said it recorded 77.8 trillion won in revenue and 14.1 trillion won in operating profit for the quarter, up 18% and 51% respectively from last year's numbers. .

The company's chip division contributed more than half of its total operating profit with 8.5 trillion won. Samsung enjoyed favorable conditions in the memory market as chip prices fell less than expected, like fellow chipmaker SK Hynix during the quarter.

The Korean tech giant said demand for DRAM and NAND remained stable during the quarter, mainly from data centers. Samsung said that while the uncertainty about whether the shortage of components will be too severe, demand for memory chips from servers is expected to remain relatively high during the remaining time. back of the year, Samsung said.

Besides memory, the foundry or contract chip manufacturing business also recorded its highest-ever first-quarter revenue, Samsung said, although the company did not disclose specific earnings figures. this business division.

Samsung noted that chip shortages are expected to continue, which will benefit the foundry business given the shortage of global contract chip production capacity, and said it will focus on on improving the productivity rate of advanced processing nodes.

Meanwhile, Samsung's mobile division - known as the MX and Networks business - was the second largest contributor to operating profit, raking in 3.82 trillion won.

The company said the launch of the Galaxy S22 smartphone series during the quarter helped drive growth, with the Galaxy S22 Ultra-powered S-Pen being particularly well received by previous Galaxy Note customers. Samsung said sales of mid-range 5G smartphones, tablets and wearables also contributed to strong profits.

Samsung Display, a subsidiary that manufactures display panels, also contributed 1.1 trillion won in operating profit to the quarterly total.

The subsidiary supplied a lot of OLED displays during the quarter due to steady demand for the display from high-end smartphone customers - that is, Apple and Samsung.

Samsung Display also noted that its QD display was commercialized during the quarter, with the on-screen application being well received. It plans to supply QD screens for TVs in the third quarter, the unit said.

However, Samsung's consumer electronics business units, which sell TVs and home appliances, saw their combined operating profit figure drop year-on-year to 0.8. trillion won.

The company noted that Russia's invasion of Ukraine caused demand for TVs to drop, while last year's earnings from businesses benefited from pent-up demand caused by the Covid-19 pandemic.