South Korean tech producer Samsung Electronics has outpaced semiconductor giant Intel to become the largest semiconductor company in the world. In 2021, Samsung made a $74.36 billion chip business as it declared its revenue on Thursday.
Samsung has been one of the top semiconductor producers worldwide. Since the company made a 29% increase in its earnings last year, Samsung has climbed up to the top position. It leveled up against the U.S. chip producer Intel, beating them in the company revenue.
According to officials, Samsung was at its peak due to its chip production and operations at Suwon, Suwon, Gyeonggi province as it earned 86.29 trillion won in 2018. Revenue from memory chip production alone went up to 72.6 trillion won in 2021.
Ben Suh, Samsung’s executive vice president of investor relations, spoke to the media after the company’s revenue release. “Compared to last year, results improved significantly, driven by solid demand across overall applications, as well as increases in our advanced node portion and average selling price,” Ben stated.
Since the world was facing a shortage in chip supply, the demand and price for chip production and supply rose last year. The price and demand factor indeed played a crucial role in earning Samsung the number one position. Consequently, the company also increased its capacity in manufacturing and operations.
According to a Samsung official, the record performance occurred through the combination of both increased capacity through the advanced manufacturing process and high price due to rise in demand. “In foundry, … on a year-on-year basis, results improved due to the start of operations at the S5 fab (in Hwaseong, Gyeonggi Province) in conjunction with price adjustments,” the official stated.
It was a 55% increase in operating profit for the South Korean chip producer. With 29.2 trillion won in 2021, the profit accounted for 60% of the total revenue from Samsung’s chip business. However, its contribution was larger in 2017 and 2018, for the two consecutive years.
With the company reaching the top position, Samsung also announced its 43.6 trillion won investment in semiconductor-driven facilities for larger output. The company aims to meet the demand for advanced nodes.
Additionally, the company has committed to understanding uncertainties involved in chip production with fresh investments. Samsung looks forward to strengthening the central nerve of the business.
“Challenges associated with supply chain issues and COVID-19 are likely to persist,” Suh said. “During this year, we will also promote partnerships, secure technology, and execute investments to gain leadership in future growth areas such as 5G, AI, cloud, IoT, and the metaverse,” he added.