Samsung Electronics announced its fourth quarter 2017 results with sales of KRW 65.98 trillion and operating profit of KRW 15.15 trillion on a consolidated basis. Both sales and operating profit are the highest ever in the quarter. For the entire year of 2017, it achieved sales of KRW 239.58 trillion and operating profit of KRW 53.65 trillion.

Sales in the fourth quarter increased by approximately 24% year-on-year due to the continued favorable memory market conditions and increased sales of flexible OLED panels, and operating profit also increased by KRW 5.9 trillion year-on-year due to a significant improvement in the profitability of the semiconductor business. The operating profit ratio also recorded 23%.

The components business saw increased performance due to continued strong memory prices and expanded flexible OLED supply.

The set business improved its performance year-on-year due to increased sales of premium products in the wireless segment, but smartphone sales decreased, especially in the mid- to low-priced segment. In the CE business, TV sales increased, but performance slightly decreased year-on-year due to decreased market demand, while home appliances increased their performance due to brisk sales of premium products such as FlexWash.

The fourth quarter performance showed a negative impact of about KRW 660 billion compared to the previous quarter, mainly due to the won strengthening against the dollar and other major currencies. In addition, the payment of special bonuses to semiconductor executives and employees also affected the performance.

This year, it is expected that performance growth will continue, centered on the components business, as the supply and demand for memory continues to remain strong. The set business will focus on maintaining solid performance by focusing on securing profitability through differentiation of premium products.

Meanwhile, the first quarter is expected to see a decrease in demand due to the off-season and negative economic impacts due to exchange rate fluctuations.

In the component business, memory is expected to see solid demand for DRAM for data center servers, but shipments are expected to decrease due to the conversion of some of the 11 lines that produce DRAM into image sensor lines. In addition, OLED profitability may weaken due to the possibility of decreased demand for displays due to the off-season in the smartphone market.

In the case of the wireless business, the set business is expected to see improved performance due to increased sales of premium products such as the launch of the Galaxy S9, and the CE business plans to focus on securing profitability.

In 2017, facility investment amounted to 43.4 trillion won. By business, it was 27.3 trillion won for semiconductors and 13.5 trillion won for displays.

In response to the growing demand for V-NAND, the company expanded its Pyeongtaek semiconductor line and invested in expanding its foundry 10nm process capacity. In addition, it actively invested in expanding its OLED capacity to meet the growing demand from customers for flexible OLED panels, resulting in a significant increase in its total investment last year compared to 2016. Investment plans for this year have not yet been finalized, but are expected to decline compared to last year.

In the mid- to long-term, the parts business is expected to see an increase in demand due to the expansion of new applications, and the set business is expected to see business opportunities expand centered on software and connectivity.

Samsung Electronics plans to respond to these changing industry trends through a strategy of connecting various AI/IoT-based devices and services.

In the case of semiconductors, demand for high-capacity memory for cloud and servers and chipsets for battlefields and AI is expected to increase, and the company plans to strengthen the competitiveness of semiconductor products based on advanced miniaturization processes.

OLED plans to strengthen its premium competitive edge by launching foldable products and actively pursue expansion into new applications such as IT and battlefields.

Wireless will continue to differentiate its smartphones based on cutting-edge technologies such as foldable OLED, while also pursuing new businesses related to AI and IoT based on its 5G technology.

CE plans to strengthen its TV leadership by incorporating new technologies such as 8K and Micro LED, and expand the application of Bixby in home appliances to enhance connectivity and usability between products.