Samsung Electronics announced its biggest profits in the first quarter since 2018 based on strong cell phone sales led by its Galaxy S21 line.
The Korean giant’s net profit increased 46.3% compared to the same quarter of 2020 to 7.1 trillion won ($ 6.4 billion; £ 4.6 billion).
Sales of television and home appliances grew strongly, driven by continued demand to stay at home.
However, the company’s profits were hurt by disappointing results for its chip business.
“Solid sales of smartphones and consumer electronics outweighed the minor gains with semiconductors and monitors,” the company said in a earnings report.
Its main competitor for premium phones, Apple, also reported surprising results on Tuesday, with iPhone sales in China helping to double the company’s profits since the start of the pandemic.
Both companies performed well during the pandemic, as many customers chose to upgrade their phones, laptops and other devices to work from home.
Samsung is forecasting a slightly weak second quarter followed by more solid results in the second half as the economic recovery from the Covid-19 pandemic gains momentum and more consumers are looking to upgrade to 5G mobile services.
Slower chip sales
Despite high demand due to global shortages, Samsung’s chip business was hit by the cost of increasing production domestically and a storm-related shutdown at its Texas plant in February.
However, the factory has resumed full production and the world’s largest chipmaker expects stronger results for its semiconductor business in the second quarter.
The electronics giant warned that this could be offset by a decline in flagship smartphone sales and continued supply problems with some components.
The figures came a day after the family of the late Samsung President Lee Kun-hee announced plans to pay more than 12 trillion won ($ 10.78 billion) in inheritance taxes on his assets.
The tax issue has been closely observed, as it may impact the Lee family’s participation in Samsung.
However, the announcement gave little clarity on whether or not the Lee family would sell any shares to pay the tax.