First-quarter revenue recorded 55.33 trillion won and operating profit 6.45 trillion won.
COVID-19 related uncertainty expected to continue in the second half of the year
Q1 capital investment approximately 7.3 trillion won, with semiconductors alone accounting for 6 trillion won.


Despite the impact of COVID-19, Samsung Electronics' sales and operating profit in the first quarter rose slightly compared to the same period last year.

On the 29th, Samsung Electronics announced its first-quarter 2020 results, reporting revenue of 55.33 trillion won and an operating profit of 6.45 trillion won.

Sales in the first quarter fell 7.6% compared to the previous quarter due to the off-season for displays and CE and some impact from COVID-19. Compared to the same period last year, it increased by 5.6% due to increased demand for server and PC components.

Operating profit decreased by 0.7 trillion won due to factors such as a decline in sales, despite improved memory performance compared to the previous quarter; however, compared to the same period last year, it increased by 0.2 trillion won due to improvements in the wireless product mix and continued diversification of small and medium-sized OLED customers.

In the semiconductor division, profits for memory improved compared to the previous quarter due to sustained mobile demand amidst rising demand centered on servers and PCs, while profits for system semiconductors increased driven by expanded supply of mobile components to major clients.

In the display division, profits for small and medium-sized panels decreased compared to the previous quarter due to the off-season, but the deficit for large panels narrowed slightly as the rate of decline in selling prices slowed.

Although the IM division saw a decline in sales volume at the end of the quarter due to the global spread of COVID-19, profits increased compared to the previous quarter and last year thanks to an improved product mix following the launch of flagships such as the S20 and efficient execution of marketing expenses.

The CE division saw a decline in performance compared to the previous quarter due to the off-season and the impact of COVID-19. The Harman division also experienced a drop in performance compared to the previous quarter, significantly affected by one-time costs related to the relocation of factories in Europe.

Regarding the exchange rate impact in the first quarter, there was a positive impact centered on the parts business due to the strength of the dollar and euro, but the overall exchange rate impact on operating profit was minimal as major growth market currencies weakened against the won.


Q2 and second half "cloudy"
A Samsung Electronics official predicted a decline in performance compared to the previous quarter in the second quarter as the impact of COVID-19 on demand for major products intensified.

In the components business, while demand for memory in servers and PCs is expected to remain robust, the risk of slowing mobile demand persists. OLED's performance is expected to weaken due to the slump in the smartphone market.

The set business is expected to see a significant decline in sales volume and performance of key products due to weakened demand caused by COVID-19, as well as the impact of store closures and factory shutdowns.

Harman is expected to continue experiencing weak performance amid the impact of temporary shutdowns at global automotive factories.

High uncertainty due to COVID-19 is expected to continue in the second half of the year.

Accordingly, regarding the components business, Samsung Electronics plans to strengthen technological dominance and cost competitiveness in memory through the transition to finer manufacturing processes, while for OLED, it plans to respond to demand for new products and pursue the expansion of new applications. In the set business, the company plans to continue preparing innovative products that improve the consumer experience.

Wireless plans to strengthen its lineup by introducing new foldable and Note products and expanding mid-to-low-end 5G services, while Network intends to focus on enhancing technology and global capabilities to strengthen its 5G business. The CE division plans to implement marketing and promotions tailored to market conditions in each country.

Capital expenditure in the first quarter amounted to approximately 7.3 trillion won, with semiconductors accounting for 6 trillion won and displays 0.8 trillion won. Investments in memory capacity expansion and process conversion are continuing as originally planned, while investments in foundry operations were executed primarily through expansion to meet demand for EUV advanced processes.