Samsung Electronics, whose traditional cash cow used to come from smartphones, said it would focus on its components businesses -- chip and display, projecting slow smartphone sales this year in a regulatory filing Tuesday.

The world’s largest memory chip and smartphone maker said it posted 53.3 trillion won ($45.7 billion) in sales and 9.2 trillion won in operating profit in the fourth quarter, a 50 percent jump year-on-year.

“The fourth quarter earnings were driven by the components businesses -- memory and display panels. This year, Samsung will (continue to) push sales growth centering on components businesses,” the Korean tech giant said in its statement.

In the fourth quarter, Samsung’s chip business posted a record-breaking 4.95 trillion won in operating profit, accounting for more than half of the company’s total quarterly operating income thanks to favorable market conditions and surge in prices.

“For NAND, demand for mobile products such as high-density SSD remained solid while industry supply was restricted. For DRAM, supply and demand conditions remained favorable,” Samsung explained.

The Korean tech giant also showed optimistic memory outlook this year, saying stable demand from mobile and servers is expected to continue.

“For NAND, it posted around 10 percent growth in the fourth quarter. This year, around 30 percent growth is expected due to strong demand for high-density SSDs in servers and mobile storages,” Jeon Se-won, an executive at Samsung’s memory unit, said in a conference call on Tuesday. 


Samsung‘s display unit, for its part, also reported its best quarterly profit in more than four years. The display business, which posted 1.3 trillion won in operating profit, was mainly driven by growing demand for OLED panels. Due to its flexible characteristics, many Chinese tech firms including Huawei and Xiaomi began to adopt OLED panels, dominated by Samsung holding more than 96 percent market share.

“For OLED, we will increase flexible product supplies by increasing production capacity. For LCD, we will expand unique products such as frameless and curved panels,” Samsung said.

The company’s mobile division, which was hit hard by the Note 7 explosions last year, was fully recovered due to strong sales of its flagship smartphones Galaxy S7 and S7 Edge that had unveiled in February. The smartphone unit posted 2.5 trillion won in operating profit, still slightly higher from the same period of the previous year.

Despite the recovered sales, Samsung predicted slow smartphone sales this year in the increasingly saturated market globally.

“This year‘s smartphone market will be slow entirely. We will unveil new services such as AI-related services for flagship models and add functions such as waterproof, dustproof and fingerprint scanners for low-end smartphones,” Samsung said.

By Shin Ji-hye (shihjh@heraldcorp.com)