Business
Samsung achieved highest 1Q22 sales record, yet questions remain for future growth
In the first quarter of 2022, Samsung hit an all-time record sales of 78 trillion won, but its future is surrounded by suspense as supply chain disruptions troubled by the Ukraine war, China’s COVID-19 lockdown, and global demand.
To secure its future growth, Samsung needs to take a strong decision in areas other than memory semiconductors but has not presented an aggressive investment plan.
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Ans the operating profit was also expanded by $300 billion due to the strengthening of the US dollar. The memory chip prices did not decline as rapidly as expected, and demand for server memory remained strong. Though it was a major issue over the Game Optimizing Service (GOS) app, the Galaxy S22 helped in strong smartphone sales.
Questions raised about growth prospects of Samsung!
Still, questions are raised about the company’s future growth drivers. The biggest concern is its foundry business. Recently, the prospect of some customers leaving Samsung due to foundry yield issues has raised concerns in the market.
A rumor has been going around that Qualcomm of the United States selected Taiwan’s TSMC as its partner for the production of 3-nm application processors (APs), changing its plan to work with Samsung.
Samsung’s vice president of the foundry division, Kang Moon-soo, sought to moderate situations about the company’s foundry business by disclosing its strong order flow.
“Our order balance for the next five years will be approximately eight times larger than our sales in 2021,” he said. “We are actively promoting our foundry business with a focus on advanced processes, so our order volume will continue to grow.”
However, it remains to be seen whether Kang’s remarks can assuage market concerns. There are still statements that the market share gap between Taiwan’s TSMC, the No. 1 global foundry, and Samsung will widen further this year.
On the other hand, Samsung’s market share is expected to decline 2 percentage points from 18 percent to 16 percent during the same period. TSMC submitted plans to invest up to US$44 billion in establishments this year, while Samsung’s annual investment in the foundry sector is about 20 trillion won.
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