Total consolidated revenue was a record for the third-quarter at KRW 76.78 trillion despite a challenging business environment, while operating profit declined 23% from the previous quarter to KRW 10.85 trillion. With record revenue in each of the respective quarters so far this year, the Company expects annual revenue to surpass the historical high set in 2021.

Earnings in the Memory Business declined as inventory adjustments of customers exceeded market expectations and demand for consumer products remained weak. The System LSI Business saw lower profits due to weak demand for mobile phones and TVs, while the Foundry Business posted a record quarterly revenue on improving yields in advanced nodes.

SDC (Samsung Display Corporation) saw record revenue for the mobile panel business as demand increased following the release of new flagship smartphones, including foldables, while the large panel business continued to post losses amid weak TV and monitor markets.

The MX (Mobile eXperience) Business posted solid profitability, driven by sales of flagship products, including foldables, as well as new wearables. The Networks Business saw an improvement in earnings, led by overseas businesses, including securing a deal with Comcast.

The Visual Display Business expanded sales of premium products, but earnings declined due to weak demand and increased costs. The Digital Appliances Business, despite enhanced product mix, saw continued challenges due to higher materials and logistics costs amid sluggish demand.

The strength in the US dollar against the Korean won benefited the Company’s component businesses, resulting in an approximately 1.0 trillion won company-wide gain in operating profit compared to the previous quarter.

In the fourth quarter, while the Memory Business expects there to be fundamental server demand based on core infrastructure investments, inventory adjustments are likely to continue. The Company plans to actively address demand for high-density products and maintain priority on DRAM profitability. For the System LSI Business, new products from mobile customers are expected to drive growth in SoC revenue while in the Foundry Business, earnings momentum is expected to continue on solid demand from global customers and additional yield improvements.

SDC expects to maintain earnings growth in the mobile panel business, driven by strong demand for premium OLED panels for smartphones. The large panel business will expand the quantum-dot (QD)-OLED presence, increasing its customer base.

The MX Business will continue to sustain strong sales of premium smartphones and expand sales of tablets and wearables. The Company plans to focus on profitability amid ongoing macroeconomic uncertainties. For the Networks Business, the Company plans to expand overseas businesses, including in North America and Japan.

In the Visual Display Business, the Company will prioritize capturing demand in the premium segment and enhancing profitability through cost efficiency. The Digital Appliances Business will aim to increase revenue with higher sales in the premium segment and online channels during the year-end seasonality.

In 2023, demand is expected to recover to some extent, but macroeconomic uncertainties are likely to persist. The DS (Device Solutions) Division plans to actively address demand for high-density products and expand contributions from advanced nodes and adoption of new applications. The DX (Device eXperience) Division will continue to strengthen the leadership in premium segments and enhance the multi-device connectivity experience across mobile, TVs and home appliances.

In the Memory Business, after a dampened first half, demand is expected to rebound centering on servers as data center installations resume. The Company plans to align its supply strategy with the mid-term market outlook, taking into account the limited overall production in the industry. With the reorganization of the SoC business, the System LSI Business will further enhance competitiveness, and the Foundry Business is expected to reinforce advanced node technology leadership and win new orders in HPC and automotive segments.

For SDC, the Company plans to continue focusing on premium smartphones and boost sales to new applications, such as IT and gaming. The large panel business will seek to increase sales of QD-OLED by expanding the product lineup and enhancing the performance.

The MX Business will aim to boost revenue by increasing sales of flagship products centering on foldable devices and the S series. The Company also plans to secure solid profitability by strengthening large-screen premium tablets and maintaining high growth of wearables. The Networks Business will sustain revenue growth by expanding overseas businesses and reinforcing technology leadership in core 5G chips and vRAN (virtualized Radio Access Network) solutions.

In the Visual Display Business, the Company will maintain leadership in ultra large screen and premium market segments. The Digital Appliances Business will continue to make product innovations in energy-efficient and eco-conscious home appliances and aims to achieve revenue growth, mainly from the premium segment.

Foundry Delivers Record Earnings; Memory to Aim for Higher-than-market Bit Growth in Q4

The Semiconductor businesses posted KRW 23.02 trillion in consolidated revenue and KRW 5.12 trillion in operating profit in the third quarter.

For the Memory Business, as customers’ inventory adjustments exceeded market expectations and the demand for consumer products continued to weaken, both DRAM and NAND bit growth were below guidance and its earnings declined compared to the previous quarter.

For DRAM, in the face of a worsening slowdown in demand across the industry, the Company maintained a disciplined sales strategy focused on profitability, and its inventory levels increased somewhat. For NAND, Samsung strengthened its product portfolio by consistently increasing the high-density portion in mobile and server OEM applications, but its overall bit growth was below guidance.

Looking to the fourth quarter, the Company aims to deliver bit growth that exceeds the market for both DRAM and NAND by actively addressing demand, focusing on high-density and high-performance products, in line with the needs of its customers.

For DRAM, Samsung will continue to strengthen its cost competitiveness and secure profitability by expanding cutting-edge node migration for server products, and also prepare 16Gb-based products to cope with demand for high-density products of 64GB and higher. Moreover, the Company will focus on solidifying its market leadership by responding to LPDDR5x demand for new flagship mobile models. As for NAND, the Company will actively respond to the demand for high-performance and high-density products while also capitalizing on NAND’s high price elasticity to steadily unlock new demand.

Moving on to 2023, although geopolitical uncertainties are likely to dampen demand to some degree in the first half, demand may recover later next year, driven by resumed installations of data centers and the adoption of DDR5 for new CPUs. Regarding production, Samsung will align its supply strategy with mid-term outlook considering limited overall production in the industry. In particular, it will reinforce market leadership by actively meeting the rising demand for new interfaces, including DDR5 and LPDDR5/x, and for high-density products.

The System LSI Business saw its earnings decline in the third quarter due to a decrease in demand for major components. However, SoC revenue grew thanks to an increased portion of 5G, and the Company reinforced the foundation for mid- to long-term growth by winning OEM orders for automotive SoCs.

In the fourth quarter, Samsung expects sales in the SoC business to increase on the effects of a new product launch by major mobile customers, while its new low- to mid-priced SoCs are scheduled to start mass production.

In 2023, the Company will expand sales in volume-zone SoCs while also strengthening the competitiveness and status of flagship products. In addition, it will work closely with foundries in order to smoothly supply various 200-megapixel image sensors.

The Foundry Business achieved its highest ever quarterly revenue and operating profit in the third quarter thanks to steady improvements in advanced process yield and increased revenue contributions.

Following the shipment of the world’s first mass-produced 3-nanometer GAA, Samsung further strengthened its technology leadership by presenting next-generation 2-nanometer and 1.4-nanometer roadmaps.

In the fourth quarter, revenue is expected to see double-digit growth sequentially on solid demand from all applications, maximum production of an optimized product mix, and an increased advanced-node portion of production. The Company also expects to deliver record sales and operating profit on an annual basis for 2022.

Looking ahead to 2023, demand in the first half is expected to slow temporarily due to macroeconomic uncertainties, an economic slowdown, and inventory adjustments at customers. However, Samsung still expects to deliver annual growth on the back of second half contributions from mass production for new customer orders and continued strength in HPC, datacenter, and Auto demand.

Mobile Display Earnings Improve; Large Display to Continue QD-OLED Expansion  

SDC posted KRW 9.39 trillion in consolidated revenue and KRW 1.98 trillion in operating profit for the third quarter.

Mobile display earnings improved both year-on-year and quarter-on-quarter thanks to growth in demand attributable to launches of new models by major smartphone brands. The Company’s business strategy, which concentrates on premium OLED products led to the record-high quarterly earnings.

For large displays, although sales of QD-OLED products continued to rise, initial investment costs of QD-OLED caused continued loss.

Looking ahead to the fourth quarter, Samsung expects market growth to be weaker-than-normal due to sluggish consumer spending, despite strong seasonal effects for the smartphone and IT markets. The Company will try to maintain its earnings quarter-on-quarter by utilizing competitiveness in the high-end market and by capitalizing on favorable exchange rates, in spite of an otherwise unfriendly business environment.

In 2023, while macroeconomic challenges may persist, Samsung will focus on solid earnings through pre-emptive investments, development of differentiated technologies, and effective management to ensure stable quality and yield. Also, the Company will collaborate more closely with customers to increase its OLED market share, promoting the advantages of OLED in new application areas such as IT, Automotive, and Gaming.

In particular, in the AR/VR market, which is projected to enjoy full-fledged growth starting 2023, Samsung will develop the technologies that customers need and complete SCM in order to solidify its leadership in the display industry.

Flagship Sales Drive Mobile Profit; To Seek Revenue Growth and Solid Profitability in 2023

The MX and Networks businesses posted KRW 32.21 trillion in consolidated revenue and KRW 3.24 trillion in operating profit for the third quarter.

The MX Business posted higher revenue and operating profit from the previous quarter driven by new smartphone and wearable launches. Sales of the Galaxy Z Fold4 and Z Flip4 showed strong growth compared with the previous models, despite a challenging market environment. The Galaxy S22 series, launched in the first half, also maintained solid sales momentum, posting significant revenue growth from a year earlier.

Looking ahead to the fourth quarter, market demand for smartphones and wearables is forecast to increase from previous quarter due to year-end seasonality despite ongoing geopolitical issues and macroeconomic instability. Samsung aims to sustain strong sales of flagship products, including foldable devices and S22 series, and expand sales of Galaxy Ecosystem devices such as tablets and wearables. In addition, new mass market smartphone model launches is expected to help drive sales volume.

In 2023, smartphone and wearable markets are expected to grow amid continuing global economic instability. For tablets, while the low- to mid-end market is expected to contract slightly, demand for premium products is likely to remain solid. The Company will seek to maintain the high growth of foldables and expand sales of the S series, thus improving the product mix and extending revenue growth. In tablets, Samsung aims to increase revenue by reinforcing the premium product lineup and by enhancing the tablet experience through features such as S-Pen.

Moreover, the Company plans to provide a convenient multi-device experience based on SmartThings, while also boosting profitability through sales growth of Galaxy Ecosystem devices. With these efforts, it aims to achieve revenue growth in 2023 and secure solid profitability.

Visual Display Business to Focus on Premium Segment Leadership

The Visual Display and Digital Appliances businesses posted KRW 14.75 trillion in consolidated revenue and KRW 0.25 trillion in operating profit in the third quarter.

Overall market demand for TVs increased quarter-on-quarter in the third quarter led by improved seasonality, but contracted year-on-year, due to macroeconomic factors negatively affecting consumer demand. The Visual Display Business posted a decline in earnings, as a result of weaker demand, higher costs, and unfavorable currency effects in some regions. Nevertheless, the Company solidified its leadership in the premium segment.

In the fourth quarter, Samsung expects market demand to improve quarter-on-quarter due to year-end seasonality, but macroeconomic uncertainties are expected to persist. The Company plans to utilize sales opportunities such as Black Friday and global sporting events, focusing on its Neo QLED, Lifestyle, and super-big TVs. It will also focus on securing profitability through optimized operations and efficient cost management.

Looking ahead to 2023, overall TV demand is expected to remain stagnant, while demand for premium products including super-big TVs will continue to grow. Samsung will continue product innovation centered on premium products and strengthen its focus on sustainable, eco-conscious management.

Even as the COVID-19 pandemic continues around the world, reopening of key economies led to significant increase in consumer demand. Samsung Electronics was able to respond aggressively through flexible global supply chain management (SCM), reporting its highest-ever quarterly revenue.

Quarterly operating profit rose 52 percent from the previous quarter, thanks to a boost in demand for smartphones and consumer electronics as well as efficient cost management. Third-quarter operating profit was also 59 percent higher year-on-year on stronger sales of memory chips and consumer products.

The Memory Business posted solid earnings as healthy demand for mobile and PC products led to higher-than-expected shipments, outweighing the impact of lower memory chip prices. The System LSI Business also saw profit rising over demand for mobile phone components, while the Foundry Business benefitted from increased orders for high-performance computing (HPC) chips and other applications.

The Display Panel Business reported higher profit quarter-on-quarter led by growing mobile display sales on customers’ new product launches and improved supply-demand environment for large panels.

A near 50 percent jump in sales of smartphones including new flagship products, coupled with improved cost management, lifted earnings at the Mobile Communications Business from the previous quarter. The Consumer Electronics Division also witnessed a sharp growth in sales of premium TVs and appliances, supported by flexible management of supply chain and sales channels.

Looking ahead, Samsung Electronics expects profit to decline in the fourth quarter amid weakening memory chip demand from server customers and intensifying competition in mobile phones and consumer electronics.

Soft prices in server memory due to customers’ inventory adjustments will likely weigh down the Memory Business despite stable demand for mobile and laptop memory. The System LSI Business will begin supplying 5-nm 5G system-on-chips (SoCs) in earnest and the Foundry Business expects increased demand for HPC chips and mobile SoCs. In displays, mobile panel sales are set to rise significantly from the third quarter.

The Mobile Communications Business is likely to see smartphone sales decline and marketing costs increase due to competitive market environment. In Consumer Electronics, profitability is expected to weaken on growing competition and rising costs, despite solid demand.

For 2021, the Company expects a recovery in overall global demand but uncertainties will remain over the possibility of recurring epidemic waves of COVID-19.

Samsung aims to enhance its leadership in memory chips through expansion of next-generation process node, flexible production management to meet immediate demand and timely investment to address demand over the mid- to long-term.

The System LSI Business will focus on differentiated 5G SoCs and high-resolution sensors, while the Foundry Business seeks to accelerate growth by diversifying applications to HPC and securing new major customers.

As the Display Panel Business plans to launch new Quantum-Dot (QD) Displays in 2021, it will also focus on improving earnings by enhancing leadership in mobile displays.

The Mobile Communications Business plans to expand foldable and 5G model offerings globally, while the Networks Business will strengthen its global positioning on the back of growing commercial 5G services. The Consumer Electronics Division will strengthen its online and B2B presence and expand its premium product lineup.

The Company’s capital expenditures in the third quarter stood at KRW 8.4 trillion, including KRW 6.6 trillion spent on semiconductors and KRW 1.5 trillion on displays.

Robust Mobile Demand Drives Semiconductor Earnings; Foundry Reports Record Sales

The Semiconductor businesses posted KRW 18.8 trillion in consolidated revenue and KRW 5.54 trillion in operating profit in the third quarter.

Overall demand in the Memory Business was better than expected as demand for mobile applications began to recover, even as demand for servers was somewhat weaker than the first half.

For DRAM, mobile demand increased due to strong seasonality and higher sales of low- and mid-end smartphones, while it was also positively impacted by the expansion of 5G and inventory buildup from Huawei. Server demand was relatively soft due to inventory adjustment by major customers, while PC demand rose on stronger sales of laptops. In addition, graphic demand also increased with the production of new gaming consoles. The Company achieved a higher bit growth for DRAM in the quarter than its previous guidance.

For NAND, mobile demand was strong as major manufacturers launched new models along with orders from Huawei. For servers, demand declined due to inventory adjustment of major customers, while for client SSD, low- and mid-end laptop demand was robust and SSDs for new gaming consoles increased significantly. Overall NAND shipments rose across all applications, helping the Company surpass the market’s bit growth in the quarter.

Looking to the fourth quarter for DRAM, mobile demand is expected to increase with new smartphone launches, while server demand is expected to remain weak as inventory adjustments continue. For PC, low- to mid-end laptop demand is likely to remain solid, while for graphic, demand will continue to see growth with the launch of new GPUs and gaming consoles.

As for NAND, mobile demand is expected to rise on the back of improving consumer sentiment and demand from Chinese manufacturers. For server SSD, demand is likely to remain weak and prices are expected to decline as customers continue to adjust their inventory and manage their capex conservatively. However, demand for client SSD is expected to be robust as low- to mid-end laptop demand will remain solid.

For the outlook next year, while geopolitical issues and the possibility of a prolonged impact from COVID-19 remain, mobile demand is expected to show solid growth until the first half as 5G continues to expand to low- and mid-end models. For servers, it is highly likely that demand will turn around in the first half as inventory levels normalize and investments by customers recover.

The Company will continue to maintain product competitiveness by accelerating the conversion to 1z-nm DRAM and 6th-generation V-NAND, as well as developing next-generation products such as EUV-based 1a-nm DRAM and 7th-generation V-NAND.

Earnings for the System LSI Business improved on the back of a recovery in mobile components, including CIS and SoCs. Display-related products especially showed significant growth as demand for tablets and laptops increased.

In the fourth quarter, Samsung will focus on expanding the mobile SoC business as it begins to supply 5G 1-Chip SoCs, our first products to feature the 5-nm process technology. In 2021, as market demand for mobile components is expected to recover, the Company will focus on expanding shipments of 5G SoCs, high-resolution sensors and DDIs.

The Foundry Business achieved record quarterly revenue on the back of a recovery in mobile demand and increased demand for HPC chips. The Company has established a position for future growth by beginning the shipment of 5-nm mobile products and 2.5D packages.

In the fourth quarter, the business aims to achieve another record quarterly revenue by expanding mobile SoC and HPC chip shipments to major customers. In 2021, the Company expects growth in the Foundry Business to exceed the industry’s growth significantly. It plans to diversify applications to HPC, consumer and network products, and secure additional major customers.

Display Earnings Improve, Expects Higher Demand in Q4

The Display Panel Business posted KRW 7.32 trillion in consolidated revenue and KRW 0.47 trillion in operating profit for the third quarter. Its earnings improved driven by increasing sales of smartphone, TV and monitor panels, despite the impact of COVID-19.

Mobile display earnings rose as recovering demand from major customers for smartphone screens lifted utilization rate. Losses from large displays narrowed slightly QoQ on increasing panel prices and higher sales of ultra-large TV and high-performance monitor panels.

Looking ahead to the fourth quarter, the Company expects solid demand for mobile displays led by new smartphone launches. It will actively respond to customer demand and enhance product mix to increase sales and profit. For large displays, the Company will continue to address existing LCD customer demand and accelerate the transition to new QD Display technology.

While uncertainties will likely continue in 2021 due to COVID-19 and global trade conflicts, the Company expects a gradual recovery in the smartphone market driven by 5G services and will focus on enhancing its leadership in OLED panels.

Samsung will also accelerate innovation to deliver new form factors and expand adoptions by new applications. For large displays, the Company plans to launch QD Displays in due time and build the foundation of new premium panel business.

Strong Smartphone Sales Drive Mobile Profit; Competition to Intensify in Q4

The IT & Mobile Communications Division posted KRW 30.49 trillion in consolidated revenue and KRW 4.45 trillion in operating profit for the third quarter.

Overall market demand increased in the third quarter as stimulus measures helped many economies recover following lockdowns during the second quarter. The Company’s smartphone sales rose sharply from the previous quarter, with the launch of new flagship models such as the Galaxy Note20 and Galaxy Z Fold2, as well as stronger sales of mass-market models in key regions including India.

Efficient cost management through component standardization and reduction in marketing expenses led to a significant improvement in profitability. Sales increase in tablets and wearables including the Galaxy Tab S7, Galaxy Watch3 and Buds Live also contributed to the profit growth in the third quarter.

Looking ahead to the fourth quarter, the overall market demand is expected to increase QoQ due to strong year-end seasonality and continued recovery in the overall demand. However, smartphone sales are expected to decline QoQ due to subsiding effects from new flagship model launches. Higher marketing expenditure to respond to intensifying competition and year-end seasonality is also likely to weigh down profit.

In 2021, while mobile market demand is expected to increase YoY backed by continuous economic recovery and accelerating migration towards 5G networks, uncertainties persist over the COVID-19 pandemic. The Mobile Communications Business aims to expand its smartphone sales by strengthening lineup for foldable phones and mass-market 5G models.

For the Networks Business, the Company strengthened its foundation for 5G business by signing a large-scale supply contract with Verizon in the U.S. The Company will continue to expand its 5G coverage in South Korea and push to expand the business globally including North America and Japan.

Appliances, TV Earnings Improve on Increased Demand

The Consumer Electronics Division, comprised of the Visual Display and Digital Appliances businesses, recorded KRW 14.09 trillion in consolidated quarterly revenue and KRW 1.56 trillion in operating profit.

Demand for TVs surged both QoQ and YoY as the “At-home” trend buoyed sales of high-resolution home cinema. The Company responded to the strong demand in time with online marketing and global SCM capabilities, increasing sales in QLED, super large screen TVs and Lifestyle TVs.

In the fourth quarter, uncertainties from COVID-19 will linger and rising costs during the year-end peak season remain a risk. The Company plans to continue to expand online sales and online-to-offline (O2O) special promotion to enhance premium lineup such as QLED and Lifestyle TVs.

For the outlook next year, the Company expects further changes to the TV market environment from the pandemic. It will continue to introduce premium models such as QLED, Micro LED for home, in order to lead the super large-screen TV segment.

The Digital Appliances Business saw growth in the third quarter from recovering sales of premium lineup including Bespoke refrigerator and Grande AI washer/dryer. Increased sales of dryers and Air Dressers (garment refreshers) also helped, as COVID-19 raised consumers’ interest in better hygiene.

As a recovery in developed markets is expected to lead demand in the fourth quarter, Samsung will focus on flexible seasonal promotions and strengthen logistics and online marketing to improve profitability.

In 2021, gradual recovery is expected in the digital appliance market. The Company will strengthen premium lineup such as Bespoke for sustainable growth, as well as expanding online and B2B business.