Samsung and LG Electronics Shine in Crisis, Continue Strong Performance This Year

On the 29th, when Samsung Electronics announced its confirmed third-quarter results, employees were coming and going at the Samsung Electronics building in Seocho-gu, Seoul. Despite the resurgence of the novel coronavirus (COVID-19), Samsung Electronics achieved a record high with third-quarter sales approaching 67 trillion won this year. Operating profit also exceeded 10 trillion won for the first time in two years. The third-quarter operating profit was 12.3533 trillion won, an increase of 58.83% compared to the same period last year. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Dongwoo Lee] Samsung Electronics and LG Electronics achieved strong performance last year despite the COVID-19 pandemic, and expectations for a record boom this year are growing.

According to the industry on the 10th, Samsung Electronics' provisional figures for last year showed annual sales of KRW 236.26 trillion and operating profit of KRW 35.95 trillion. Sales increased by 2.54% compared to the previous year (KRW 230.4 trillion), and operating profit rose by 29.46% from the same period (KRW 27.77 trillion).

The rise in memory semiconductor prices and the special demand for server memory semiconductors due to COVID-19 drove overall sales. The Device Solutions (DS) division's operating profit is reported to have increased by about 35% year-on-year to around KRW 19 trillion. Additionally, the Consumer Electronics (CE) division's operating profit is estimated to have increased by about 40% year-on-year to approximately KRW 3.5 trillion.

The securities industry also forecasts that Samsung Electronics' annual operating profit this year will exceed KRW 50 trillion, marking an all-time high. Previously, the company recorded KRW 53.65 trillion in 2017 and KRW 58.89 trillion in 2018.

Expectations are rising that the growth potential of system semiconductors, strengthened by the foundry (semiconductor contract manufacturing) business, as well as the improvement in supply and demand of DRAM and NAND this year due to low inventory levels among semiconductor companies, will drive growth.

▲LG Electronics electronic billboard installed at Atletico Madrid. (Provided by LG Electronics)

LG Electronics recorded its highest-ever sales and operating profit last year, with sales of KRW 63.2638 trillion and operating profit of KRW 3.1918 trillion. Sales increased by 1.5% compared to the same period last year (KRW 62.3062 trillion), and operating profit rose by 31% from the same period (KRW 2.4361 trillion). Notably, this is the first time LG Electronics' annual operating profit has exceeded KRW 3 trillion.

The stay-at-home trend due to COVID-19 led to steady growth in domestic and international sales of hygiene and health care appliances, and premium products such as OLED and NanoCell TVs in markets like North America and Europe drove overall performance. LG Electronics also positively impacted operational efficiency by strengthening online-specialized products and digital marketing.

The securities industry expects operating profit to remain in the KRW 3 trillion range this year as well. DB Investment Securities analyzed, "Even without the special demand seen last year, LG Electronics can achieve KRW 3 trillion in operating profit this year. The new home appliance boom and expansion of OLED TV sales will be key points to watch."

This content was produced with the assistance of AI translation services.