For the fourth quarter ending December 31, net profit rose 40% to KRW 2.56 trillion ($2.59bn) compared to KRW 1.83 trillion ($1.85bn) in the same period a year earlier. The results were the first gain for the company in five quarters. Sales rose 12% to KRW 15.52 trillion ($15.73bn).
The Suwon, South Korea-based company is experiencing strong demand for its flat-panel TVs and semiconductors. Its seems that consumers are finally starting to move away from bulky cathode-ray tube televisions, which for years offered far better picture quality at cheaper prices than flat panels. Falling prices of flat screens and improvements in the picture quality have no doubt helped.
The company has invested heavily in flat panels, and makes its own flat panel televisions and is a major supplier of the liquid crystal displays used in other manufacturers’ TV sets, as well as in laptops and mobile phones. Sales of liquid crystal displays in the fourth quarter jumped 54% from the year before to KRW 3.01 trillion ($3.04bn).
However, Samsung is also the world’s largest maker of memory chips, and demand for its NAND chips was particularly strong. These chips are widely used in devices such as MP3 players such as Apple’s iPod Nano as well as digital cameras, both of which are large sellers in the consumer market.
DRAM, dynamic random access memory, chips are used in personal computers, while NAND, so-called flash memory chips, are widely used in digital cameras and MP3 players. Semiconductor sales grew 6.5% to KRW 5.09 trillion ($5.15bn).
The company is well known for heavily investing in new technologies. In September, it announced that it would spend $33bn over the next seven years on a semiconductor manufacturing and development complex near its Seoul headquarters in order to better compete against market leader Intel Corp. Then in November it said it would invest $614m into new memory chip lines to increase production of its DRAM and flash products.
For the full year, the results were less impressive. Net profit fell 29% to KRW 7.64 trillion ($7.74bn) while sales slipped 0.3% to KRW 57.46 trillion ($58.24bn). However, the 2004 figures were slightly distorted because the company profited from high memory chip prices and strong prices for LCDs in the first half of that year.
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