Samsung Electronics posted 53.6 trillion won in operating profit last year, breaking the 50 trillion won barrier for the first time in its history. The figure is almost twice more than 29 trillion won logged in the previous year. The Korean electronics giant chalked up 239.6 trillion won in annual sales, the most-ever.
Samsung Electronics on Jan. 9 announced its provisional business performance. The company logged 66 trillion won in sales and 15.1 trillion won in operating profit for the fourth quarter of 2017, the best-ever on a quarterly basis.
Samsung Electronics’ superb performance is owed to the booming semiconductor business. The industry has a four- or five-year cycle alternating between boom and recession.
The so-called Semiconductor Super Cycle, which started off in early 2017 in the wake of the 4th Industrial Revolution, continued into year-end, heaving the company’s business performance. The semiconductor business took up a 65 percent of the operating profit in 2017. The business accounted for a whopping 70 percent of the operating profit recorded in the fourth quarter of the year. The figures were higher compared to the mid-40 percent logged in 2015 and 2016.
A matter of utmost concern is when the semiconductor super rally comes to an end. Samsung Electronics is likely to suffer a setback in its business performance after the semiconductor boom plays itself out because its dependence on the semiconductor business is too high. The global market survey company Gartner reported that Samsung Electronics topped the global semiconductor market, beating Intel in terms of sales last year, and the former will likely find it difficult to retain the global No. 1 position for a long time.
But Korean securities and investment companies released rosier outlooks for Samsung Electronics to retain the status quo due to the monopolistic market and technology gaps with Chinese companies.
‘Don’t Rest on Laurels; Get Back to Basics’
In his New Year’s message, Samsung Electronics President Kim Ki-nam said, “Uncertainties, including the spreading of nationalism and trade protectionist moves and geopolitical risks are forecast to be intensified, and the rapid paradigm shift of the IT industry like AI, self-driving cars and big data are demanding new challenges.”
President Kim stressed that the company ought to get back to basics with new changes and challenges without resting on its laurels. He set three goals for the company: becoming a super world-class tech company creating the future; creating a corporate culture suiting sustainable growth; and being a company beloved by customers and society.
To put them into practice, he proposed the following: establishing an environment to develop creative and innovative technologies; securing technology power to spearhead the 4th Industrial Revolution; building a flexible corporate culture sans barriers; attaining manners corresponding to a super world-class company with leading by example and concern; and contributing to community through win-win strategies with Korean and foreign industry ecosystem.
He made the remarks at a ceremony to kick off the 2018 business year at the Samsung Digital City in Suwon on Jan. 2.
Samsung C&T Appoints 3 New Division Heads
Samsung C&T conducted a reshuffle on Jan. 9, promoting Senior Executive Vice President Lee Young-ho to president, heading the construction division, replacing President Choi Chi-hun, who was appointed to be the chairman of the board of directors of Samsung C&T. Senior Executive Vice President Koh Jung-seok was promoted to president of the trading division, replacing outgoing President Kim Shin, while Kim Bong-young, president in charge of the resort division, was replaced by Senior Executive Vice President Chung Kum-yong.