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Samsung Electronics Announces Second Quarter 2018 Results

Samsung Electronics reported financial results for the second quarter ended June 30, 2018. The Company posted KRW 58.48 trillion in consolidated quarterly revenue, down 4 percent from a year earlier, and KRW 14.87 trillion in quarterly operating profit, up 6 percent.

 

Second quarter revenue fell due to softer sales of smartphones and display panels, despite robust demand for memory chips. The continued strength of the Company’s memory business contributed to the higher operating profit. Net profit was little changed from a year earlier due to higher income tax.

 

Both revenue and operating profit decreased from the previous quarter. The Korean won weakened against the US dollar but rose against the euro and several other key currencies, resulting in a negative impact of net KRW 400 billion on the quarterly operating profit compared with the previous quarter.

 

By business unit, the Semiconductor Business continued to deliver strong earnings, driven by demand for DRAM chips used in data centers and NAND flash memory for high-capacity storage, amid a softening of NAND prices. Samsung solidified its competitive positioning by focusing on value-added products, including 64GB and higher-density server DRAM based on the 1X nanometer technology and 128GB and higher for NAND mobile storage.

 

In the Display Business, the Company saw weak demand for flexible OLED panels in the second quarter while the shipment and price for LCD panels also fell.

 

Amid the stagnant high-end smartphone market, the IT & Mobile Communications Division reported a drop in earnings, both year-on-year and quarter-on-quarter, over slow sales of the Galaxy S9. The network business, however, achieved solid growth led by investments in LTE networks by key global customers.

 

Stronger sales of premium TVs such as the QLED models, helped by a major global soccer event, lifted profits from the Consumer Electronics Division, although the Digital Appliances Business saw earnings decline due to weak demand for air conditioners.

 

Looking ahead, Samsung expects sustained strength in the memory market and growing demand for flexible OLED panels to drive earnings higher in the second half.

 

The outlook for the memory chip business remains strong across all applications thanks to demand for server and PC memory as well as new mobile product launches. Samsung will proactively address demand for differentiated products such as high-density server memory and High Bandwidth Memory. The Company will also strengthen its technological leadership by increasing the portion of 10 nanometer-class products and expanding mass production of 5th generation V-NAND.

 

The System LSI and Foundry businesses are set to benefit from higher demand for mobile APs and image sensors. Flexible OLED shipments are expected to rise, even as competition is seen intensifying over rigid products.

 

The mobile market condition will likely remain challenging in the second half amid pricing competition and new product launches. The Company will respond through the early introduction of the Galaxy Note and competitive mid- and low-end models with new features. Earnings from the TV business will continue to improve as Samsung expands sales of new innovative premium models including QLED and 8K TVs.

 

Over the mid- and long-term, Samsung expects new opportunities in the component business from the ongoing transformation in the industry, led by the Internet of Things (IoT), artificial intelligence (AI) and 5G technologies. The set businesses will also benefit from the introduction of new form factors and innovative technologies to support growing demand for connected devices.

 

In the component business, Samsung will use its cutting-edge semiconductor technology to capitalize on new demand for chipsets used in automotive and AI applications. The Company will also leverage its strength in OLED panels to take advantage of wider applications in the IT and automotive industries.

 

The Company’s capital expenditure in the second quarter was KRW 8.0 trillion, including KRW 6.1 trillion for the Semiconductor Business and KRW 1.1 trillion for the Display Business. It brings the total spent in the first half of 2018 to KRW 16.6 trillion.

 

 

Semiconductor to see Continued Strong Demand in Second Half

The Semiconductor Business posted consolidated revenue of KRW 21.99 trillion and operating profit of KRW 11.61 trillion for the quarter. The memory business achieved strong results despite weak seasonality, as overall demand growth was solid, driven by servers for data centers.

 

For NAND, demand remained robust on the back of the continuing trend toward higher density for smartphones and the increase in demand for server SSD due to expansion of cloud infrastructure. Samsung posted solid earnings by responding to new mobile device launches and demand for higher density products. The Company also focused on value-added and high-density SSD for servers.

 

For DRAM, server demand stayed strong owing to the ongoing shift to higher density and expansion of data center infrastructure. PC demand remained robust, driven by increasing demand from large OEMs, while strong gaming demand helped the graphics segment. In the mobile market, despite concerns over a slowdown in smartphone growth, increase in memory content per device continued.

 

For the second half outlook for NAND, adoption of SSD is expected to expand into more sectors and all product segments are projected to use more high-density eStorage. For servers, demand for SSD for data centers is forecast to remain strong, while for enterprise, adoption of high-density server SSD over 8TB is expected to continue.

 

In mobile, demand for high-density storage for new smartphones and high-end models is likely to remain robust. Samsung will increase server SSD supply and respond to high-density eStorage demand based on 64-layer 3D NAND products and competitiveness of high-density solutions.

 

As for the second half DRAM outlook, strong demand from all applications is expected to continue. For servers, demand growth is forecast to persist due to expansion of data center demand from the US and Chinese markets, while high-performance cloud services are also projected to launch.

 

In mobile, in addition to new flagship smartphone launches, memory content is projected to increase in mid-range models as they begin to support high-specification mobile games, on-device AI and dual camera features. In addition, PC demand will be driven by back to school sales, while graphics demand will be led by the buildup for game consoles. Samsung will focus on strengthening product competitiveness via continuous expansion of 10 nanometer-class technology migration and expanding sales of high value-added products, such as high-density server DRAM, HBM2 and LPDDR4X.

 

In the mid- to long-term, the trend toward high-performance and higher density servers for data centers is expected to continue due to expansion of AI-related services based on machine learning and adoption of in-memory database. In mobile, demand growth is projected to continue, as the need for high-performance devices increases with the rise of high-density content. Samsung will closely monitor the market condition and the supply and demand conditions of each segment to maintain sustainable earnings in the mid- to long-term with the industry’s leading technology.

 

For the System LSI Business, overall earnings declined due to weaker demand for mobile application processors and DDIs, but demand for image sensors continued to increase on the back of higher adoption of dual cameras from Chinese smartphone manufacturers. In the third quarter, earnings are expected in increase QoQ on demand for image sensors and DDIs amid strong seasonality for smartphones.

 

In the second half, overall earnings are projected to improve compared with the first half, led by strong demand for OLED DDIs and high-pixel image sensors. In addition, Samsung plans to diversify its customer base for mobile APs from China and develop chips for use in automotive and IoT applications. Mid- to long-term, the Company will focus on developing chipsets for 5G, multiple cameras and display panels, seeking to achieve higher growth compared to that of the market.

 

For the Foundry Business, total earnings continued to grow QoQ due to strong demand for High Performance Computing (HPC) chipsets, mobile APs and image sensors. In addition, by securing orders for 8-inch specialty products, the Company has established a base for achieving stable earnings going forward. Earnings are expected to be solid in the second half on the back of higher demand for mobile APs and image sensors. Samsung will also strengthen process technology leadership by beginning 8-nanometer mass production and EUV-based 7-nanometer test production.

 

The Company expects revenue to exceed USD 10 billion in 2018, following sales of USD 9.8 billion in 2017, securing a strong second place in the foundry market.

 

 

Display to Rebound in Second Half Led by Flexible OLED

The Display Panel Business posted KRW 5.67 trillion in consolidated revenue and KRW 0.14 trillion in operating profit for the quarter.

 

For OLED, earnings decreased QoQ despite improved factory utilization for rigid products, as demand from major customers for flexible panels remained slow. Earnings from LCD also declined from the previous quarter as the shipment and average panel price continued the downward trend.

 

Looking ahead to the second half, OLED sales are expected to rebound on recovering demand for flexible displays. Samsung aims to increase market share by actively addressing customer demand while enhancing technological and price competitiveness. The Company will incorporate more value-added features into panels and reinforce its competencies in new applications such as foldable displays, seeking new growth drivers.

 

For LCD, Samsung expects demand to grow in the second half for premium TV panels that are used in high-resolution and ultra-large models, amid peak seasonality. Intensified competition and the industry’s capacity expansion will limit improvements in profits, but the Company will continue to focus on profit with differentiated high-end products such as Quantum Dot and 8K resolution TV panels.

 

 

Mobile Posts Sluggish Sales, Networks Grows on LTE Expansion

The IT & Mobile Communications Division posted KRW 24.0 trillion in consolidated revenue and KRW 2.67 trillion in operating profit for the quarter.

 

Amid the sluggish premium smartphone market and intensifying competition, Samsung’s smartphone shipments and revenue declined QoQ due to the slow sales of Galaxy S9 and S9+ as well as the phasing out of older low-end models.

 

The Company posted a drop in quarterly operating profit due to higher marketing expenses. Meanwhile, the Networks Business saw a healthy sales growth as major overseas carrier partners increased investments in LTE expansion.

 

Demand for smartphones and tablets is forecast to increase in the second half as the market enters a period of strong seasonality, but competition is seen intensifying as new smartphone models are released. In response, Samsung will seek to expand sales by introducing a new Galaxy Note earlier than usual, which offers exceptional performance for a reasonable price. Also, Samsung plans to strengthen price competitiveness and adopt advanced technology in the mass models.

 

Looking to the future, the Company will continue to reinforce product competitiveness based on hardware leadership, by adopting cutting-edge technology and new form factors and gaining leadership in 5G. Furthermore, based on the ever-evolving Bixby ecosystem which connects smartphones, TVs, refrigerators and other IoT devices, Samsung aims to offer personalized service to customers and create synergy with other services such as Samsung Pay.

 

As for the Networks Business, the Company will supply its major partners with 5G network solutions and continue to invest to become the global leader in next-generation network solutions.

 

 

Consumer Electronics to Maintain Premium Market Leadership

The Consumer Electronics Division, including the Visual Display and Digital Appliances businesses, posted KRW 10.4 trillion in consolidated revenue and KRW 0.51 trillion in operating profit for the second quarter.

 

The overall TV market saw demand grow from a year ago as a major global soccer event lifted sales. Samsung reported a significant boost in earnings in the TV business due to strong sales of its premium products, including QLED and ultra-large screen TVs.

 

Following a successful restructuring of its product line-up, Samsung led expansion of the premium TV market, winning more than 50% market share in the ultra-large screen segment of 75-inches and above.

 

For the Digital Appliances Business, the overall market decreased YoY largely due to the instability in emerging markets, although developed markets posted a moderate growth. Samsung continued to expand sales of its premium products in the second quarter, including the Family Hub refrigerator and premium air purifier “CUBE”. However, earnings decreased slightly YoY, due to weak demand for air conditioners.

 

Looking to the second half, the TV market is projected to grow YoY, especially in developed economies. Samsung will work to further improve profitability by focusing on sales of premium TVs and maximizing shipments during the year-end peak season. The Company’s second half release of the industry’s first AI- based 8K QLED TV is expected to further solidify its position as a leader in the premium TV market.

 

As for the Digital Appliances Business, the Company will focus on profits by enhancing peak-season promotions in key regions including Black Friday, and expanding sales of premium products and built-in home appliances.

 

 

Consolidated Sales and Operating Profit by Segment based on K-IFRS (2016~2018 2Q)

 

Note 1: Sales for each business include intersegment sales

Note 2: CE (Consumer Electronics), IM (IT & Mobile Communications), DS (Device Solutions), DP (Display Panel)

Note 3: Information on annual earnings is stated according to the business divisions as of 2018.

Note 4: From Q1 2018, earnings from the Health & Medical Equipment Business (HME) are excluded from the CE Division

Samsung Electronics Announces First Quarter 2018 Results

Samsung Electronics posted KRW 60.56 trillion in consolidated revenue and KRW 15.64 trillion in operating profit for the first quarter of 2018.

 

First quarter revenue was primarily led by Samsung’s Memory Business and increased sales of its flagship mobile products, including the Galaxy S9.

 

Total revenue grew approximately 20 percent YoY to KRW 60.6 trillion. Operating profit for the quarter was a record high, posting an increase of KRW 5.7 trillion YoY. Profitability improved significantly in the quarter thanks to the Semiconductor Business and the early global launch of the Galaxy S9. All in all, the operating margin in the first quarter was 25.8 percent, up 6.2 percentage points YoY.

 

By business unit, the Semiconductor Business’ significant earnings performance was driven by demand for memory chipsets for high value-added servers and graphics products. The System LSI and Foundry businesses also contributed to first quarter earnings, backed by strong demand for chips used for smartphones and crypto-currency mining.

 

For the Display Panel segment, which manufactures OLED and LCD screens, profits were affected by slow demand for flexible OLED panels and greater competition between rigid OLED and LTPS LCD. An imbalance between supply and demand in the LCD market, brought on by competitors’ increased production capacity, also weighed on earnings.

 

For the IT & Mobile Communications Division, the early launch of the Galaxy S9 and solid sales of the Galaxy S8 smartphones resulted in considerable growth in earnings.

 

As for the Consumer Electronics Division, earnings by the Visual Display Business slid YoY following an adjustment in its TV lineup where some mid-range to low-end products were removed. As for the Digital Appliances Business, rising raw material prices and other factors impacted profitability.

 

For the second quarter, Samsung expects the Memory Business to maintain its strong performance, but generating overall earnings growth across the company will be a challenge due to weakness in the Display Panel segment and a decline in profitability in the Mobile Business amid rising competition in the high-end segment.

 

Demand for server and mobile DRAM is expected to be robust and orders for high-density storage chips will grow as the price of NAND softens in the second quarter. For the System LSI and Foundry businesses, shipments of 10-nanometer APs and crypto-currency mining chips will expand but earnings will be impacted due to sluggish demand for smartphone components.

 

The Display Panel segment will seek profitability in OLED by cutting costs and improving yield, amid the weak demand for flexible products. As for LCD panels, oversupply is anticipated despite an expected boon in TV sales in time with an upcoming major global soccer event.

 

In the Mobile Business, profitability is expected to decline QoQ due to stagnant sales of flagship models amid weak demand and an increase in marketing expenses. Meanwhile, earnings for the Consumer Electronics Division are projected to improve due to increased shipments of new products such as QLED TVs and strong seasonal demand for air conditioners.

 

The overall business outlook for the second half regarding components is positive, as the company looks forward to strong demand for DRAM and increased sales of OLED panels.

 

For set products, Samsung aims to sustain profitability by strengthening its market leadership in the sales of premium products despite challenging global market conditions.

 

In the mid to long term, Samsung will strengthen its business capabilities by delivering differentiated technology in the component business and solidifying its leadership in cutting-edge technologies such as AI and 5G. The company believes opportunities will widen for the set business, as digital devices become increasingly connected.

 

Total capital expenditure in the first quarter was KRW 8.6 trillion including KRW 7.2 trillion for the Semiconductor Business and KRW 0.8 trillion for the Display Panel segment.

 

Samsung has not yet finalized its capex plan for 2018, but the company expects it to decline YoY. Capex rose substantially in 2017 due to efforts to respond to market growth and emerging technologies, which included expanding the production capacity for flexible OLED panels.

 

 

Semiconductor Posts Solid Earnings on Strong Memory Performance

The Semiconductor businesses posted KRW 11.55 trillion in operating profit on consolidated revenue of KRW 20.78 trillion for the quarter.

 

Overall, the Memory Business achieved strong earnings, despite weak seasonality, thanks to a continuation of favorable market conditions as well as strong server demand.

 

For NAND, demand remained stable due to an expansion of cloud infrastructure and the continuation of a trend toward higher density solution products. Samsung posted solid earnings by concentrating on sales of high-density mobile storage and value-added solutions, including SSDs over 2TB for datacenters and over 8TB for enterprise, backed by a stable ramp-up of 64-layer 3D NAND production at the company’s Pyeongtaek plant.

 

For DRAM, demand stayed strong thanks to growth in servers and graphics products. Server demand remained high due to continuous expansion of datacenter infrastructure. Mobile demand saw a stable increase thanks to content growth across all segments while PC demand saw moderate growth in line with seasonal patterns. In graphics, total demand increased thanks to strong demand for both graphics and crypto-currency mining cards.

 

Looking at the second quarter outlook for NAND, total demand is expected to increase. Datacenters will remain a key driver for SSD demand, and mobile demand is forecast to be strong as the high-density trend continues. Samsung will continue to increase high-density server SSD supply and drive more eStorage strategies. Looking further ahead to the second half, server and mobile demand is expected to be solid, as the trend of SSD replacing HDD accelerates and storage expansion across smartphone segments continues. The company will focus on continued migration to 64-layer while also strengthening product and cost competitiveness and ramping up next-generation products in a timely manner.

 

As for the second quarter DRAM outlook, strong server demand is anticipated due to datacenter expansion in the US and China. Mobile demand, driven by content growth, is expected to remain solid. Samsung will focus on expediting qualification of 1Ynm and expanding 1Xnm products, while maintaining a flexible product mix. For the second half, demand from all applications is set to increase. Robust server demand will continue while AI and machine learning will drive demand for high-performance High Bandwidth Memory (HBM). For graphics, strong demand for consoles and VGA cards for crypto-currency mining will continue. Solid mobile demand is expected as manufacturers consider high-performance and high-density memory for flagship devices. Samsung will focus on flexible supply and investment, and expanding value-added sales through high-density server DRAM and differentiated products such as HBM2 and LPDDR4X.

 

For the System LSI Business, mobile DDI earnings declined due to slow OLED panel demand, but overall earnings increased amid strong demand for mobile processors and image sensors. In the second quarter, demand for premium smartphone components is expected to slow, and Samsung will focus on the stable supply of mobile processors and image sensors for flagship models. Looking further ahead to the second half, demand for image sensors is expected to rise as manufacturers increasingly adopt dual cameras and 3-stack FRS sensors. The company will focus on sustaining growth in mobile processor sales and expanding its offerings from mobile to areas such as IoT, VR and automotive.

 

For the Foundry Business, despite weak seasonality, total earnings grew QoQ due to increased demand for High Performance Computing (HPC) chipsets. During the quarter, the company also broke ground on an EUV-line at its Hwaseong plant to address future demand for 7-nano and below products. In the second quarter, solid demand for high performance chipsets is expected. Samsung plans to expand HPC and 10-nano mobile products and promote FD-SOI and 8-inch processes. In 2018, despite slowing mobile demand, the company aims to diversify its customer and application bases and continue to offer derivative processes, including those for 8- and 11-nano chips. Through these efforts, the company expects to achieve over USD 10 billion in sales and maintain a strong second place in the foundry market in 2018.

 

 

Display to Improve Production Efficiency

The Display Panel business posted KRW 7.54 trillion in consolidated revenue and KRW 0.41 trillion in operating profit for the quarter.

 

For the OLED business, QoQ earnings declined due to a slowdown in demand and intensified competition between rigid OLED and LTPS LCD panels.

 

For the LCD business, despite a decrease in shipments under weak seasonality and a continued decline in LCD panel ASPs, earnings remained flat QoQ thanks to cost reductions and an expansion in the sales portion of value-added LCD products, boosted particularly by UHD and large-sized panels.

 

Looking ahead to the second quarter, amid forecasts for weak demand for OLED panels, Samsung will strive to secure profitability by reducing costs and improving production efficiency. For LCD, under unfavorable supply-demand conditions due to capacity expansions in the industry, the company will focus on developing value-added and differentiated products as well as reducing costs.

 

For the second half, OLED panels in the smartphone industry are expected to see a rebound in demand, especially as demand for flexible panels remains strong in the high-end segment. Under these circumstances, Samsung will strengthen cost competitiveness and diversify its customer base through new products and technologies in order to increase market share. The company will also aim to secure new growth engines by applying its competencies in new applications on top of smartphones.

 

For LCD in the second half, while the company foresees market uncertainties due to growing competition and capacity expansions, Samsung will continue to strengthen its strategic partnerships with major business partners and differentiate its value-added products, including large-sized and high resolution TV panels.

 

 

Mobile Earnings to Decrease in Q2 with Higher Marketing Costs

The IT & Mobile Communications Division posted KRW 28.45 trillion in consolidated revenue and KRW 3.77 trillion in operating profit for the quarter.

 

While overall market demand for smartphones and tablets declined during weak seasonality, Samsung’s smartphone shipments increased QoQ due to an early release of the Galaxy S9 and S9+ as well as solid sales of the Galaxy S8. As a result of increased sales, mainly driven by premium models, revenue and profit significantly increased both QoQ and YoY. Earnings for the Networks Business also improved due to LTE investments from major overseas partners and an expansion of new solutions for optimization of network operations.

 

Looking ahead to the second quarter, Samsung expects earnings to decrease QoQ due to a slowdown in sales of its flagship models and increased marketing expenses to address the situation. Samsung will aim to maintain sales momentum of the Galaxy S9 and S9+ by expanding the operation of experiential stores, strengthening the cooperation with partners, and reinforcing promotional programs such as trade-ins.

 

For the second half, Samsung will seek to strengthen sales in the premium market by launching a new flagship model and maintaining long-tail sales of the Galaxy S9, S9+, and flagship models from the previous year. In the mass segment, Samsung will introduce new models optimized for specific markets and strengthen both offline and online sales channels. Moreover, Samsung will continuously invest in expanding the Bixby 2.0 open ecosystem to provide a seamless multi-device experience for consumers.

 

For the Networks Business, the company expects increased earnings QoQ for the second quarter and will focus on continued growth by expanding its LTE business and leading the world’s first commercialization of 5G.

 

 

Consumer Electronics to Focus on Premium Products  

The Consumer Electronics Division posted KRW 9.74 trillion in consolidated revenue and KRW 0.28 trillion in operating profit for the quarter.

 

Overall, the TV market decreased QoQ due to slow seasonality following the year-end holiday, but grew YoY due to increased demand in emerging markets such as the CIS, the Middle East, and Latin America.

 

Although earnings were slightly down YoY, due to a restructuring of the sales mix with a defocus on the entry lineup, the company maintained its leading position in the premium TV market by continuing to achieve high market share in the USD 2,500 and above premium segment, thanks to expanded sales of flagship models, including QLED and ultra-large screen TVs.

 

Looking to the second quarter, TV market demand is projected to deliver YoY growth, driven mainly by demand momentum from the major global soccer event and growth in emerging markets. Samsung will aim to improve results by expanding sales of new models, particularly during the soccer competition. For 2018, the market is forecast to slightly grow. With the addition of the company’s launch of 8K and Micro LED TVs in the second half, Samsung will seek to solidify its premium leadership and focus on ensuring sustainable and profitable growth in the mid to long term.

 

For the Digital Appliances Business, the market saw moderate growth in the first quarter due to increased demand in both developed and emerging markets. Samsung’s sales improved YoY thanks to strong sales of premium products, including the FlexWash washing machine, Cube air purifier and system air conditioners. However, earnings decreased slightly YoY due to an increase in prices of raw materials and operating costs of the new factory in North America.

Looking to the second quarter, Samsung will aim to accelerate growth by expanding its premium lineup, including QuickDrive washing machine and POWERStick PRO vacuum cleaner, and by increasing air conditioner sales during the peak season. For 2018, the company will continue to focus on strengthening premium sales in advanced markets, reinforcing its B2B business for built-in appliances and system air conditioners, and expanding its online business.

 

 

Consolidated Sales and Operating Profit by Segment based on K-IFRS (2016~2018 1Q)

Note 1: Sales for each business include intersegment sales

Note 2: CE (Consumer Electronics), IM (IT & Mobile Communications), DS (Device Solutions), DP (Display Panel)

Note 3: Information on annual earnings is stated according to the business divisions as of 2018.

Note 4: Earnings from the Health & Medical Equipment Business (HME) are excluded from the CE Division in 1Q 2018.

Samsung Electronics Announces Fourth Quarter and FY 2017 Results

Samsung Electronics posted KRW 65.98 trillion in consolidated revenue and KRW 15.15 trillion in operating profit for the fourth quarter of 2017.

 

Overall, the company reported full-year revenue of KRW 239.58 trillion and full-year operating profit of KRW 53.65 trillion.

 

Fourth quarter earnings were driven by the components business, with the largest contribution coming from the Memory business that manufactures DRAM and NAND, as orders for high-performance memory products for servers and mobile storage were strong. However, weak seasonality impacted growth for the System LSI and Foundry businesses.

 

The Display Panel business, which manufactures OLED and LCD screens, saw increased shipments of OLED panels for premium smartphones, but profitability for LCD panels decreased due to weak seasonality, which dampened sales and ASP.

 

For the IT & Mobile Communications Division (IM), earnings in the mobile business declined due to a hike in marketing costs under strong seasonality. Total smartphone shipments decreased due to the lineup optimization of low-end models, while shipments of flagship products, such as the Galaxy Note 8, increased from the previous quarter. In the network business, customers’ LTE investments concentrated in the first half, resulting in the weak earnings in the second half.

 

The Consumer Electronics Division, comprising the TV and home appliances businesses, posted gains for the quarter. TV earnings increased QoQ on increased sales of premium products including ultra large-size and QLED models. For home appliances, demand for high-end washing machines and ovens in North America and Europe was responsible for stronger revenue on a YoY basis.

 

As indicated in Samsung’s preliminary earnings announcement in early January, operating profit was affected by the appreciation of the Korean won against the U.S. dollar and other major currencies, with the impact amounting to approximately KRW 660 billion QoQ. A one-off incentive paid to employees of the semiconductor division also affected earnings.

 

Looking ahead, the first quarter, despite being a traditionally slow season, is expected to show strong demand for memory products used in datacenters. Shipments of System LSI products are forecast to pick up, as orders for APs and image sensors for flagship devices are expected to improve.

 

The Display Panel business in the first three months of the year is likely to face challenges such as intensified competition from LTPS LCD vendors and seasonally weak LCD demand. In spite of this, Samsung will try to improve profitability by increasing the high-end LCD portion of screens and enhancing productivity of flexible OLED panels, among other measures.

 

In the first quarter, the company expects the mobile business to improve its earnings, led by an increase in sales of flagship products with the launch of Galaxy S9. Samsung’s TV business will be affected by weak seasonality, but is aiming to be profitable by expanding sales of premium products and pushing for the early release of new models. Meanwhile, the Digital Appliances Business will focus on achieving growth by increasing sales of premium products and strengthening marketing.

 

In 2018, demand for NAND is likely to remain strong and market conditions are forecast to be stable. Samsung will expand 64-layer V-NAND production mainly at its Pyeongtaek plant. As for DRAM, the company expects solid demand growth due to new datacenter builds and will increase product competitiveness by expanding 10nm-class process migration. As for Foundry, Samsung will lead the technological process leadership with a risk production of 7-nano.

 

For the Display Panel business in 2018, the company expects OLED to become a mainstream panel in the smartphone industry and will reinforce its competencies in new applications such as foldable, automotive, and IT displays. In the case of LCD panels, it will focus on meeting the market’s needs for ultra large-size and high-resolution TVs and strengthening partnerships with strategic customers.

 

For Mobile in 2018, the company will pursue earnings growth by increasing premium products sales and maintaining profitability of mid-range to low-end products. The Networks Business plans to expand the supply of network solutions for 5G commercialization to major markets including Korea, the U.S., and Japan.

 

For the CE Division this year, sales of ultra large-size TVs will continue to grow as the global market gears up for major international sporting events, including the FIFA World Cup and Winter Olympics. The Digital Appliances Business is expected to improve earnings by expanding its B2B business and online sales.

 

Total capital expenditure (capex) executed in 2017 was KRW 43.4 trillion. Investment in the display panel segment reached KRW 13.5 trillion, while the Semiconductor business was accountable for KRW 27.3 trillion. The total was up significantly YoY because of investments in the Pyeongtaek plant and efforts to address demand for the foundry business and flexible OLED panels. Samsung’s capex plan for 2018 has yet to be finalized, but we expect the total amount to decrease on a YoY basis.

 

Looking at the mid to long term, Samsung expects the components business to see demand expand from new applications. For the set business, the company expects to enjoy increased opportunities mainly related to software, connected devices, and services based on AI/IoT platforms.

 

In semiconductors, as demand for high-density memory products for cloud servers and for chipsets required for automotive electronics and AI is expected to increase, Samsung will boost its technology competitiveness with cutting-edge processes and solutions with next-generation packaging.

 

The OLED panel business will strengthen its competitiveness in the premium segment with the release of foldable panels, and focus on expanding new applications in areas such as automotive electronics by capitalizing on its technology and cost competitiveness.

 

As for the Mobile business, Samsung will continue its efforts to differentiate its smartphones by adopting   cutting-edge technologies, such as foldable OLED displays. It will also drive forward new businesses related to AI/IoT by strengthening the ecosystem based on Bixby and building on Samsung’s 5G technology.

 

The CE Division will bolster its leadership in the TV market by applying new technologies, such as 8K and Micro LED. Samsung will also improve the connectivity and usability of home appliances by expanding the application of Bixby.

 

 

Semiconductor Maintains Strong Earnings

The Semiconductor businesses posted KRW 10.90 trillion in operating profits on consolidated revenue of KRW 21.11 trillion for the quarter.

The Memory Business achieved strong earnings amid favorable market conditions. For NAND, overall demand was strong due to strong seasonality for mobile, particularly high-density mobile products, as well as solid growth for server SSD. Samsung strengthened profitability and posted solid earnings by promptly responding to strong demand for higher-density and value-added memory products for newly launched mobile models and server SSD. For DRAM, demand for all applications increased QoQ amid peak seasonality. Server demand remained solid due to cloud expansion, new datacenters, and higher-density trends. Mobile demand also remained strong thanks to increasing set numbers and content growth, mainly from new flagship model launches. The company posted improved earnings by meeting demand for differentiated products, such as high-density server DRAM over 64GB and low-power LPDDR4X, and by flexibly managing its product mix.

 

Looking at the first quarter outlook for NAND, server SSD demand from major cloud providers is expected to remain strong despite weak seasonality, and the high-density trend from high-end smartphones is likely to continue. Therefore, overall demand is expected to remain steady QoQ. On the supply side, supply is forecast to be limited despite industry expansion of 64-layer products. Samsung will focus on accelerating 64-layer transition and strengthening product differentiation via its V-NAND-based solutions. For 2018, stable market conditions and strong demand are anticipated and the company will focus on mass production of V-NAND while strengthening technology leadership through a ramp-up of the next generation product after 64-layer.

 

As for the DRAM outlook in the first quarter, datacenter demand is expected to offset slow seasonality. Mobile demand is likely to decrease under the weak seasonal effect, however the decline is likely to be less than it was in the previous year thanks to demand for high density at the high-end and content growth at the low-end. Samsung will focus on continuing its flexible product mix strategy and strengthening cost competitiveness through expansion of 1xnm process migration. For 2018, continued demand for servers is expected due to new datacenter builds and increasing memory usage. Mobile demand is also expected to grow due to increasing requirements for high performance games, on-device AI, and hardware upgrades such as dual cameras. Samsung will look to enhance cost competitiveness through 10nm-class migration and expanding sales of high-density server DRAM.

 

For the System LSI Business, earnings slowed as sales of mobile processors and image sensors decreased under weak seasonality. In the first quarter, Samsung will seek to ramp-up production of mobile processors for premium phones and expand sales of high-valued-added 3-stack Fast Readout Sensors (FRS). In 2018, demand for image sensors is expected to grow as smartphone vendors increase adoption of dual camera and 3-stack FRS. The company aims to post solid earnings by increasing mobile processor sales and expanding offerings to IoT, VR and automotive applications.

 

For the Foundry Business, earnings decreased on weak seasonality. That said, sales in China increased as the company secured new customers. In the first quarter, earnings are expected to rise on the ramp-up of 2nd generation 10nm process products for this year’s flagship smartphones and growing demand for cryptocurrency mining chips. In 2018, Samsung will provide 8nm and 11nm processes to meet customers’ needs and start a risk production of 7-nano. In addition, we will increase its mass production capabilities at the new S3 and S4 lines for various products including mobile processors and image sensors.

 

 

Display Posts Quarterly Growth

The Display Panel business posted KRW 11.18 trillion in consolidated revenue and KRW 1.41 trillion in operating profit for the fourth quarter. Despite decreased revenue from LCD panels due to lower ASPs under weak seasonality, total earnings for the display business grew QoQ, driven by increased shipments of OLED panels for flagship smartphones.

 

In 2018, OLED is expected to become the mainstream panel in the smartphone market, specifically in the high-end segment. Samsung will make efforts to actively address customers’ demands and differentiate its technology over LTPS LCD, as well as seeking new growth engines.

 

As for LCD in 2018, while the company foresees market uncertainties due to intensified competition, Samsung will strive to solidify its position by offering differentiated products based on its technology leadership. Moreover, Samsung will reinforce its strategic partnerships and expand the sales of value-added products.

 

Looking to the first quarter, the OLED business is likely to be affected by declining demand due to weak seasonality and by intensifying competition with LTPS LCD in the smartphone market. To secure profitability, Samsung will focus on product line-ups for flagship smartphones and expand its customer portfolio. In addition, the company will improve the productivity of flexible OLED panel manufacturing.

 

For LCD in the first quarter, even though a decline in LCD demand is expected under weak seasonality, the company forecasts stable utilization thanks to rising demand for large-sized and high-resolution TVs led by major sporting events in the first half. Samsung will also focus on cost reduction and yield improvement as well as expansion of value-added products such as UHD, large-sized, and Quantum Dot products to enhance its profitability in response to market conditions.

 

 

Mobile Sees Strong Flagship Sales

The IT & Mobile Communications Division posted KRW 25.47 trillion in consolidated revenue and KRW 2.42 trillion in operating profit for the fourth quarter.

 

While total smartphone shipments decreased compared to the last quarter, mainly in mass smartphones, sales of flagship models such as Galaxy Note 8 increased. Mobile business earnings decreased due to an increase in marketing cost amid strong seasonality.

 

Looking ahead to 2018, demand for smartphones is expected to rise thanks to growing replacement demand for premium smartphones. In order to expand the sales of premium smartphones, Samsung will strengthen product competitiveness by differentiating core features and services, such as the camera and Bixby, and reinforce the sell-out programs and experiential stores. In addition, Samsung plans to continue optimizing its mid- to low-end lineup and enhancing productivity in order to achieve qualitative growth of the smartphone business.

 

In the first quarter, amid forecasts for weak demand for smartphones and tablets due to low seasonality, the company expects to increase its smartphone shipments backed by the newly launched Galaxy A8 and A8+ and upcoming release of the Galaxy flagship, which will launch next month. Both sales and operating profit are expected to grow QoQ due to the rise in ASP.

 

For the Networks Business, the second half of 2017 saw weak earnings following the completion of LTE investments from its major overseas partners in the first half. Samsung aims to strengthen its business foundation by supplying LTE base stations, mainly in North America, in the first quarter. For 2018, the company will focus on continuing to expand the supply of 5G-ready network solutions into major markets, including Korea, the U.S., and Japan.

 

 

Consumer Electronics to Focus on Premium Products

The Consumer Electronics Division, including the Visual Display and Digital Appliances businesses, posted KRW 12.72 trillion in consolidated revenue and KRW 0.51 trillion in operating profit for the fourth quarter.

 

In the fourth quarter, the global TV market grew by double-digits QoQ thanks to the year-end holiday season, but the market declined YoY due to lower demand in North America, China, and the Middle East. Under these circumstances, earnings slightly declined YoY due to the company scaling back on its mid-range to low-end product lineup and lower product prices from intensified competition. However, earnings improved QoQ thanks to solid sales of premium products during the year-end peak season.

 

As for the TV market in 2018, demand for ultra-large screen and premium TVs is expected to grow led by major sporting events. As the premium market continues to expand, the company will aim to strengthen its new lineup, including ultra-large screen QLED TVs as well as 8K TVs, and bolster marketing activities. Also, Samsung will provide new experiences and add value by applying Bixby and SmartThings to its TVs.

 

In the first quarter, TV demand is expected to decline both YoY and QoQ under weak seasonality. Nevertheless, Samsung will aim to strengthen its market leadership in the premium segment by expanding premium product sales and bringing new products to market earlier.

 

For the Digital Appliances Business in the fourth quarter, the market saw moderate YoY gains due to continued growth in North America and economic recoveries in Europe and CIS. The business’s revenue grew YoY thanks to strong sales of premium products, including the FlexWash washing machine and the Flex Duo with Dual Door oven, in advanced markets. However, an increase in material costs and B2B investments in North America weighed on profit.

 

Looking ahead, in 2018, Samsung will focus on new growth by strengthening its B2B business and expanding distribution channels including online ones. In the first quarter, the company will expand its premium lineup—with products such as the new Family Hub refrigerator and washing machines with QuickDrive technology—and reinforce global marketing activities.

 

 

Consolidated Sales and Operating Profit by Segment based on K-IFRS (2016~2017 4Q)


Note 1: Sales for each business include intersegment sales

Note 2: CE (Consumer Electronics), IM (IT & Mobile Communications), DS (Device Solutions), DP (Display Panel)

Note 3: Information on annual earnings is stated according to the business divisions as of 2017.

Samsung Electronics Capital Expenditure to Reach Approximately KRW 46.2 Trillion in 2017

Samsung expects capital expenditure (Capex) for 2017 to be approximately KRW 46.2 trillion, a significant increase from 2016. Capex for the semiconductor and display businesses will be KRW 29.5 trillion and KRW 14.1 trillion, respectively.

 

In the third quarter, the company invested KRW 10.4 trillion, including KRW 7.2 trillion for the semiconductor business and KRW 2.7 trillion for the display segment. This brings the cumulative capital expenditure to KRW 32.9 trillion, as of the end of the third quarter.

 

In the Memory Business, investments are mainly focused on:

 

  • the Pyeongtaek fab to expand capacity to address rising demand for V-NAND;
  • DRAM process migration; and
  • supplementing any capacity loss resulting from the migration.

 

For the foundry business, Samsung is increasing its 10nm capacity to address rising demand for cutting-edge process technology. For the OLED business, Samsung has been concentrating its investments on expanding capacity for flexible panels to respond to growing demand.

 

In the fourth quarter, a substantial portion of the investments will be made in the semiconductor business to build infrastructure related to new sites and clean-rooms.

Samsung Electronics BOD Approves Fourth Phase of Share Repurchase and Third Quarter Dividend

Progress of Shares Buyback

On October 31, 2017, Samsung Electronics Board of Directors (BOD) approved the fourth and final phase of the share buyback and cancellation.

 

The final phase will start on November 1, 2017 and take approximately three months to complete, in which the company will repurchase and cancel 712,000 common shares and 178,000 preferred shares.

 

Samsung announced in January that it would implement a share buyback of KRW 9.3 trillion won in 2017. With the expected conclusion of the fourth phase, the company’s share buyback and cancellation of 2017 will be completed.

 

For the first three phases, Samsung has invested approximately KRW 7 trillion. It repurchased and cancelled 1.02 million common shares and 255,000 preferred shares in the first phase; 900,000 common shares and 225,000 preferred shares in the second phase; and 670,000 common shares and 168,000 preferred shares in the third phase. In sum, it is 2.59 million common shares and 648,000 preferred shares that have been repurchased and cancelled in the first three phases.

 

 

Quarterly Dividends

The BOD also approved the third quarter dividend of KRW 7,000 per share for both common and preferred.

Samsung Electronics Announces Third Quarter 2017 Results

Samsung Electronics today announced financial results for the third quarter ended September 30, 2017. Samsung’s revenue for the quarter was KRW 62.05 trillion, an increase of KRW 14.23 trillion YoY, while operating profit for the quarter posted a record KRW 14.53 trillion, an increase of KRW 9.33 trillion YoY.

 

In the third quarter, strong demand for high-performance memory chipsets for servers and flagship mobile devices was a contributing factor to the company’s overall robust performance. The Semiconductor Business registered significant earnings growth both YoY and QoQ, and the System LSI added to the earnings rally through increased sales of DDIs and image sensors. The display panel segment posted an earnings decline despite the expanded sales of flexible OLED panels for premium smartphones. The Mobile Business saw strong shipments thanks to the launch of Galaxy Note 8 and solid sales of the new Galaxy J series, but its earnings declined QoQ due to the higher sales proportion of mass-market smartphones.

 

The Memory Business achieved strong earnings results for the quarter on the back of high seasonal demand for all memory applications, the trend toward higher density chips and a continuation of favorable supply and demand conditions and prices. For NAND, the launch of flagship smartphones and the expansion of cloud infrastructure drove strong demand. For DRAM, demand for applications used in servers, mobile devices, PCs and game consoles also remained solid.

 

For the OLED business, an increase in shipments of flexible displays for customers’ new flagship smartphone launches drove an increase in sales. However, QoQ earnings declined due to an increase in start-up costs of the new OLED production line and increased competition within rigid OLED products. For the LCD business, third quarter earnings declined, as an imbalance in supply and demand led to a decrease in the ASP of LCD panels. Further, capacity expansion in the LCD industry continues to impact prices.

 

The Mobile Business saw smartphone shipments increase on the back of the global roll-out of the newly launched flagship, Galaxy Note 8, and solid performance of the new Galaxy J series. However, overall revenue and earnings decreased QoQ due to the higher sales of mid- to- low tier models.

 

Samsung’s TV business saw significant improvements in QoQ earnings driven by increased sales of premium products including QLED TVs. However, due to the higher cost of LCD TV panels and weakening demand of the TV market, YoY earnings were modestly lower.

 

Looking ahead to the fourth quarter, the company anticipates tight supply and demand conditions to continue for the Memory Business due to strong demand for servers and mobile devices. For the Display Panel segment, increased shipments of flexible OLED products and the release of new rigid OLED panels will improve earnings. However, the LCD segment will be met by weak seasonality, coupled with expanded panel supply. For the Mobile Business, the company will try to maintain solid earnings by increasing flagship sales through the global roll out of the Galaxy Note 8. Meanwhile, the Digital Appliances Business expects to continue revenue growth by ramping up sales of new products including washing machines with QuickDriveTM technology and POWERstick PRO vacuum cleaners. The TV business will focus on increasing sales of premium products including QLED and ultra-large screen TVs.

 

Moving on to business prospects for 2018, the company expects earnings to grow primarily from the component businesses, as conditions in the memory market are likely to remain favorable and the company expects increased sales of flexible OLED panels. For the Memory Business, demand for high-density, high-performance NAND will increase, as the need for larger data capacity in servers and mobile devices grows.

 

The company expects positive growth in the DRAM market, due to the development of technologies in big data, artificial intelligence and machine learning, in which faster processing and analysis of data are critical. The technological advancement of mobile devices with dual camera, 3D sensors and on-device AI will spur DRAM growth. As for next year’s outlook for the System LSI and Foundry Businesses, Samsung will continue to drive favorable earnings growth by increasing the supply of 10-nano products and image sensors, and will also focus on strengthening the competitiveness in the sub 7-nano process through investment in the EUV-related infrastructure.

 

In the display segment, Samsung will continue seeking growth by addressing market demand for flexible OLED display panels with differentiated technology, as OLED is set to become a mainstream feature in smartphones. Although global competition in the LCD panel business is expected to intensify in 2018, Samsung will strive to ensure its profitability by solidifying partnerships with key customers and enhancing the lineup of ultra-large size, high resolution, quantum dot and frameless panels.

 

As for the Mobile Business, Samsung will strengthen its leadership in the high-end market with flagship smartphones and improve profitability through optimizing product lineups. Moreover, the company will strive to secure business growth opportunities through new technologies such as 5G and by strengthening the services and software competencies.

 

For the consumer electronics business, Samsung will continue to focus on expanding premium product sales and enhancing its B2B businesses.

 

Semiconductors Deliver Strong Performance

The Semiconductor businesses posted KRW 9.96 trillion in operating profits on consolidated revenue of KRW 19.91 trillion for the quarter.

 

The Memory Business achieved strong earnings for the quarter due to strong demand from all applications amid solid supply and demand conditions. For NAND, while overall demand remained solid due to the launch of flagship smartphones and the expansion of cloud infrastructure, Samsung actively responded to demand from value-added and high density markets such as datacenter NVMe SSD. For DRAM, the expansion of cloud services and the trend for higher density drove strong demand. The company focused on maximizing profit by satisfying demand for differentiated products such as server DRAM over 64GB and low-power mobile DRAM.

 

Looking at the fourth quarter prospects for NAND, tight supply conditions are expected to remain for mobile and SSD applications, due to continued strong demand for high-density mobile products and expansion of datacenters, respectively. In response, the company will pursue a more profit-focused product mix. Looking further ahead to 2018, the trend toward high-performance, high-density mobile NAND is forecast to continue while server SSD adoption is expected to accelerate as big data needs rise. In response, Samsung will focus on expanding V-NAND supply while developing and ramping-up 5th generation V-NAND.

 

As for the fourth quarter DRAM outlook, high seasonal demand for mobile and PC is expected while datacenter expansion continues. Against this backdrop, the company will concentrate on cost competitiveness by expanding 1xnm process migration. Looking to 2018, high demand from datacenter infrastructure expansion is forecast to continue while demand for contents growth in mobile products will rise on the wide-spread adoption of dual camera, 3D sensors and on-device AI offerings. In response, the company will focus on ramping-up 10nm-class products and expanding sales of differentiated products such as HBM, high bandwidth LPDDR4X.

 

Turning to the System LSI Business, solid earnings were achieved through increased sales of mobile processors for mid- to low-end smartphones and image sensors for smartphones, while flagship phone launches lifted sales of OLED DDIs. Looking ahead, weak seasonality for processors and image sensors is expected to dampen growth in the fourth quarter. For 2018, the company will focus on sustaining growth of mobile processor and OLED DDI sales and increasing sales of image sensors amid greater adoption of dual camera features on smartphones. Further, Samsung will aim to expand its offerings to IoT, VR and automotive applications.

 

As for the Foundry Business, favorable results were achieved thanks to increased sales of 10-nano mobile products benefiting from stabilized yields and strong seasonality. Increased demand for differentiated products such as 32-nano mobile DDIs and 65-nano image sensors also contributed to earnings. Looking to the fourth quarter, although growth is likely to be limited, the company expects to diversify the 10-nano node from mobile to cryptocurrency mining applications, while diversifying the customer base for new 8-nano offerings. For 2018, Samsung will increase supply of 10-nano products and image sensors through mass production in line S3 and transformation of memory line 11 to foundry, respectively, and strengthening sub 7-nano process competitiveness by investing in EUV-related infrastructures.

 

 

Display to Improve on Flexible OLEDs

The Display Panel segment posted a KRW 8.28 trillion in consolidated revenue and KRW 0.97 trillion in operating profit for the third quarter. Revenues increased due to strong sales of flexible panels. However, total earnings declined driven by increased costs for starting-up new OLED production and decreased ASP for LCD panels.

 

For the OLED business, an increase in shipments of flexible displays for customers’ new flagship launches drove an increase in sales QoQ. However, QoQ earnings declined due to increased competition within rigid OLED products and startup costs of the new OLED production line.

 

For the LCD business, third quarter earnings declined, due to a decrease in the ASP of LCD panels. Further, capacity expansion in the LCD industry continues to impact prices.

 

Looking ahead to the fourth quarter, Samsung expects sales in the OLED business to grow based on increased shipments of flexible and rigid products. However, in the LCD business, Samsung continues to expect some supply-demand imbalance due to increased industry capacity as well as decreased seasonal demand. In response, Samsung will seek to ensure profitability through cost reduction and yield improvement, in addition to expanding the portion of high-end, value-add products such as ultra-large size, high resolution and quantum dot panels.

 

For 2018, Samsung expects OLED products to become mainstream in the smartphone industry, especially as flexible panels increase within high-end devices. The company plans to focus on achieving continuous growth through customers’ demand for flexible displays and through differentiated high-end products. In the LCD business, intensified competition among panel makers as well as capacity expansion within the industry is expected to be balanced with a growing market for premium TV panels, such as UHD and ultra-large sized. In light of these market conditions, Samsung will continue to improve profitability through reinforcing strategic partnerships with major customers, as well as expanding the value-added product lineup.

 

 

Mobile Maintains Solid Smartphone Performance

The IT & Mobile Communications Division posted KRW 27.69 trillion in consolidated revenue and KRW 3.29 trillion in operating profit for the quarter.

 

Samsung’s smartphone shipment increased on the back of the global roll-out of the newly launched flagship Galaxy Note 8 and solid performance of the new Galaxy J 2017. However, overall revenue and earnings decreased QoQ due to the higher sales portion of mid-to-low tier models.

 

Looking ahead to the fourth quarter, both smartphone and tablet demands are forecast to increase during the year-end peak season.

 

Although competition is expected to intensify in the premium segment, the company plans to focus on maintaining solid sales and profit QoQ through increased shipment of flagship models thereby enhancing the product mix.

 

As for the outlook for 2018, smartphone market growth is expected to recover; however, the difficult business environment is likely to continue due to intensifying competition and higher materials costs.

 

The company will strive to enhance leadership in the premium segment and to improve profitability through optimizing product lineups. Moreover, the company will aim to secure business growth opportunities through new technologies such as 5G and by strengthening services and software competencies.

 

Meanwhile, the Networks Business saw decreased sales and profit in Q3 QoQ due to a decline in LTE-related investment from global clients. Looking into the fourth quarter and beyond, the company expects to expand the supply of next generation 5G network solutions in the major advanced markets.

 

 

Consumer Electronics to Focus on Premium Products

The Consumer Electronics Division, including the Visual Display and Digital Appliances businesses, posted KRW 11.13 trillion in consolidated revenue and KRW 0.44 trillion in operating profit for the third quarter.

 

Despite lower demands from advanced markets, significant improvements in QoQ earnings for Samsung’s Visual Display Business were led by increased sales of premium QLED TVs. However, due to higher cost of LCD TV panels and weakening demand of the TV market, YoY earnings were modestly lower.

 

In the fourth quarter, Samsung will focus on profitability, by increasing the dominance in the premium QLED and ultra-large TV lineups, as well as reinforcing B2B growth including digital signage and Cinema LED businesses.

 

Looking ahead to 2018, major sports events, including the World Cup and Winter Olympics, are expected to drive demand for UHD and ultra-large screen TVs. Samsung will reinforce its market leadership in the premium market and further improve profitability by increasing the QLED and ultra-large TV lineups.

 

In Digital Appliances, investment costs in B2B business resulted in a decrease of YoY earnings, despite a modest increase in overall market demand and strong sales of air conditioners and washing machines in Korea.

 

New products like washing machines with QuickDriveTM technology and POWERstick vacuum cleaners are expected to drive revenue growth in the fourth quarter.

 

In 2018, Digital Appliances business looks to improve earnings by increasing shipments of premium products as well as expanding the B2B businesses and increasing online channel sales.

 


 

Consolidated Sales and Operating Profit by Segment based on K-IFRS (2016~2017 3Q)

 

 

Note 1: Sales for each business include intersegment sales

Note 2: CE (Consumer Electronics), IM (IT & Mobile Communications), DS (Device Solutions), DP (Display Panel)

Note 3: Information on annual earnings is stated according to the business divisions as of 2017.

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