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HPC chip growth propels Samsung foundry sales


Monday, January 31, 2022

Samsung Electronics has reported consolidated revenue climbed to a record high of KRW76.57 trillion (US$63.65 billion) in the fourth quarter of 2021, when its foundry business posted a new record for quarterly revenue.

Samsung's foundry operations managed to increase sales for large-scale HPC customers and secure new orders for HPC chips in the fourth quarter, the vendor said. However, profitability fell slightly due to an increase in costs arising from the delay of its advanced node ramp-up, it continued.

Samsung noted that in the first quarter of 2022, the company will focus on improving its advanced process yields to improve its supply stability. Also, the company expects to move its first-generation GAA process to mass production in the first half of this year.

Samsung is also poised to carry out its new fab investments in Taylor, Texas, and domestically in South Korea, the company said.

Samsung disclosed its system LSI operations also reached their highest-ever quarterly sales in the fourth quarter of 2021, thanks to increased demand for SoCs, display driver ICs and power management chips. The company began supplying the 4nm AMD GPU-powered SoC and expanded adoption for the 108-megapixel image sensors from customers in the fourth quarter.

Demand is expected to stay strong for OLED DDI, NFC/eSE and PMIC products in the first quarter of 2022, according to Samsung. The company plans to expand its supply of GPU and NPU improved SoCs and ultra-high resolution image sensors this year.

As for Samsung's memory business, revenue surged 44% on year in the fourth quarter of 2021. The business revenue for all of 2021 climbed 31% to KRW72.60 trillion, when the company saw its consolidated revenue increase 18% from a year earlier.

Samsung enjoyed solid memory demand, particularly demand from the server sector, in the fourth quarter, the company said. Earnings registered an on-quarter decrease, however, due to a continuation of global supply chain issues and a slight drop in ASPs.

For DRAM, Samsung continued, impacts on set production from global supply chain issues were felt throughout all applications while server demand remained strong thanks to an increase in DRAM content-per-box on increased adoption of high-core CPUs.

As for NAND flash, demand for server SSDs from major data center customers was robust in the fourth quarter, despite the impact of IC component supply chain disruptions, Samsung said. While risks, such as the spread of a COVID variant, need to be monitored, the memory business will concentrate on enhancing the balance of its portfolio, including through increased sales of cutting-edge and high-value products to support server and PC demand.

Besides, Samsung expects to continue to reinforce its memory market leadership by expanding its supply of high-performance products and increasing application of its industry-leading EUV technology.

Samsung's overall semiconductor business posted operating profits of KRW8.84 trillion on revenue of KRW26.01 trillion in the fourth quarter of 2021, representing on-year surges of 43% in sales and over 100% in profits. For all of 2021, the business generated KRW94.16 trillion in revenue and KRW29.20 trillion in operating profits.

Samsung reported operating profits of KRW51.63 trillion on consolidated revenue of KRW 279.6 trillion for 2021.

In addition, Samsung spent a total of KRW48.2 trillion in capex last year, KRW43.6 trillion or 90% of which for semiconductors, according to the company. Spending on memory was concentrated on capacity expansions and process migrations at its fabs in Pyeongtaek and China's Xi'an to address the demand for advanced nodes, including EUV-based 15nm DRAM and sixth-generation V-NAND. Foundry expenditures were focused on capacity expansions for 5nm EUV nodes.

Samsung has yet to disclose its capex outlook this year.

By: DocMemory
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