Samsung's profits rose in Q1, but the chip shortage looms over Q2

The Galaxy S21 is selling well and it's shifting to quantum dot TV technology.

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Richard Lawler
April 29th, 2021
SHANGHAI, CHINA - JANUARY 25: A man shows a Samsung Galaxy S21 5G smartphone at a flagship store on January 25, 2021 in Shanghai, China. (Photo by Wang Gang/VCG via Getty Images)
VCG via Getty Images

Like so many other tech companies over the last year, Samsung has seen booming business during the coronavirus pandemic, and sales of its newest Galaxy smartphone are strong, driving profits 46 percent higher than the same period last year. However, as Samsung released its Q1 2021 earnings figures (PDF) showing a net profit of 7.1 trillion won (about $6.4 billion), the company warned investors that the next few months, and perhaps the rest of the year will see significant impact due to the global chip shortage.

Samsung's sales of profitable DRAM memory chips remained strong. However the company said in a statement that production disruption at its Austin fab after the Texas ice storm and power outage in February contributed to lower sales for the chipmaking part of its business. Still, demand for gadgetry of all kinds, and particularly strong sales of the Galaxy S21 lineup, drove profits in the consumer electronics division higher than they've ever been in the first quarter.

In the quarter coming up, Samsung expects to see phone sales drop "as flagship smartphone sales fall and some components experience supply issues." Meanwhile the display panel business is going to focus even more on OLEDs for devices like phones, convertible folding devices, tablets and laptops. 

When it comes to bigger TV screens, Samsung didn't comment on rumors of an OLED deal with LG for next year, merely stating that the company "will channel all its efforts towards preparing for the mass production of QD displays, the next generation panel technology." In the meantime, with the Olympics approaching and demand predicted to slow as countries reach herd immunity with vaccinations, Samsung said it will focus on sales of the current Neo QLED line and Micro LED displays.

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