Samsung Says Demand for Memory Chips and Strong Smartphone Sales Boost Net Profits in Q1 2022

South Korean tech giant Samsung Electronics reported a 58.57% rise in first-quarter net profit on Thursday, driven in large part by stable demand for memory chips and strong smartphone sales.

The world’s largest memory chip maker is the flagship subsidiary of the giant Samsung group, the largest of the family empires known as chaebols that dominate the business of South Korea, Asia’s fourth-largest economy.

The conglomerate is critical to the economic health of the South – its total turnover is equivalent to a fifth of the national gross domestic product.

The firm said net income for the January-March period was 11.32 trillion won (roughly Rs. 68,155 crore), up 58.57% from the same period a year earlier.

The tech industry has been hit hard by a shortage of components to make chips, driven by a boom in global demand for electronic products and disruption to supply chains caused by the pandemic.

But analysts say it has largely benefited the world’s leading chipmaker.

Last year saw a surge in chip prices amid strong demand for chips used in personal devices and data centers, helping the firm achieve record annual sales.

Samsung’s performance “continues to be boosted by the semiconductor segment, supported by memory chips – both DRAM and NAND – by demand from data centers,” Gloria Tsuen, vice president of Moody’s Investors Service, told AFP.

Tsuen added that the disruption to a rival NAND flash factory owned by U.S. Western Digital and Japan’s Kioxia also benefited Samsung “due to reduced supply in the market.”