Boosted by chip sales, Samsung profits up 50% in Q1

Samsung reported strong results on Thursday, with first-quarter earnings up more than 50% from the same period last year.

The South Korean tech giant achieved 77.8 trillion Korean won (US$61.3 billion) in revenue and 14.1 trillion Korean won (US$11.1 billion) in operating profit, in line with its own forecast earlier this month.

The solid gains are attributed to sales of its memory chips, which have increased by nearly 40% year-over-year, grossing approximately 20.1 trillion won ($15.8 billion).

Samsung’s mobile division also benefited from strong sales of its newest smartphone lineup, which it said was “centered” on the flagship Galaxy S22 Ultra. The models were launched at a flashy event in February.

But the electronics maker also warned that headaches from long-term supply chain problems would “persist”, leading to shortages of components for its devices.

The company said it will continue to focus on efforts to bolster its stock of chips and image sensors this year.

Samsung also signaled that it expected weakened consumer sentiment for smartphones due to “prolonged geopolitical conflicts and lockdowns in some areas”.

Research provider Canalys pointed to a slowing global smartphone market, with “an unstable business environment” in the first quarter, according to the company’s vice president of mobility, Nicole Peng.

In a report last week, she noted that “suppliers face great uncertainty due to the Russia-Ukraine war, the ongoing lockdowns [Covid-19] China and the threat of inflation. All this added to the traditionally slow seasonal demand.”

Still, Samsung led worldwide sales in the first quarter, beating Apple, according to Canalys.

Samsung shares were down 0.5% in Seoul on Thursday morning.