Strong fourth quarter revenue and profits underpinned by memory chip sales
SAN FRANCISCO — South Korea’s Samsung Electronics, which last year became the No. 1 supplier of semiconductors worldwide, posted strong fourth quarter revenue and profit, boosted once again by sales of memory chips.
Samsung said its fourth quarter sales of about $61.4 billion and profit of about $14 billion were driven primarily by its components business, with the bulk of the contribution coming from DRAM and NAND flash memory. Sales of memory chips rose industry-wide throughout 2017 due to pricing gains amid a general shortage.
Samsung said orders for high-performance memory products for servers and mobile storage were particularly strong. This strength offset weakness in the company’s logic chips and foundry businesses, Samsung said.
Samsung’s semiconductor business alone posted profit of about $10.1 billion on sales of roughly $19.6 billion in the fourth quarter, Samsung said.
Looking ahead to the first quarter of this year, Samsung said it expects demand for memory chips to remain solid despite seasonal weakness.
In NAND, Samsung expects server SSD demand from major cloud providers is to remain strong despite weak seasonality. The company also expects a trend toward high-density memory from high-end smartphones to continue. Overall demand, Samsung said, is likely to remain steady quarter over quarter.
In DRAM, Samsung said it expects demand from datacenters to offset traditional seasonal weakness. Mobile DRAM demand is likely to decrease under the weak seasonal effect, but the decline is likely to be less than it was last year thanks to demand for high density at the high-end and content growth at the low-end, Samsung said.
— Dylan McGrath is the editor-in-chief of EE Times.