Seoul _ Samsung Electronics Co said yesterday its net profit topped US$10 billion last year, reaching a new landmark in its 35-year history of rising from a Third World television maker to the world's No. 1 producer of memory chips and flat panel screens.

Samsung exited last year on a weak note, with its fourth-quarter net profit falling 2% from a year earlier to 1.83 trillion won ($1.76 billion) because of squeezed margins for its mobile handsets and weaker prices for liquid crystal displays.

But the firm, one of the world's most profitable high-tech companies, had a healthy performance for the year as a whole and was forecast to do equally well this year thanks to strong demand for chips and a growing appetite for Samsung's savvy mobile phones.

Reflecting the optimism, the company planned to invest 10.27 trillion won ($9.9 billion), a 34% increase from last year, to upgrade production facilities for chips and liquid crystal displays and churn out more cell phones.

According to data released yesterday, Samsung's net income last year zoomed a whopping 81% to 10.79 trillion won ($10.39 billion), while annual sales rose 32% to 57.63 trillion won ($55.52 billion).

Last year, only nine companies in the world recorded profits of over $10 billion. Samsung's full-year profit was bigger than Intel Corp's $7.5 billion and Microsoft Corp's $8.1 billion in the last fiscal year.

``From the rising Korean won and high oil prices to difficulties in procuring raw material and China's economic retrenchment policy, many elements made the business environment particularly difficult in 2004,'' said Samsung senior vice president Chu Woosik.

Samsung remained concerned about a stagnant domestic market and the rising value of the Korean won against the US dollar, which makes South Korean exports more expensive overseas.

``However, our future prospects in 2005 look bright,'' Chu said.

He said global demand for semiconductors will increase in the first quarter. Margins and shipments of Samsung mobile handsets will pick up this year.

Samsung expects to sell 100 million cell phones this year.

Although the demand for liquid crystal displays fell in the third quarter of last year, Samsung said decreasing prices and expected surges in sales of large-screen TV sets will drive LCD demands up in the second half of 2005.

By product, sales by Samsung's semiconductor division increased by 43% last year to reach 18.22 trillion won (US$17.55 billion). With operating margins of 41.1%, the division delivered its strongest year ever, thanks to stabilising memory chip prices and rising demand for flash memory and chips for mobile gadgets.

The division for flat-panel computer and TV screens reported a 67% increase in annual sales to 8.69 trillion won ($8.37 billion), and a 111% surge in operating profits to 1.88 trillion won ($1.87 billion).

Sales of telecommunications equipment jumped 33% to 18.8 trillion won ($18.7 billion).

The telecommunications division sold 86.5 million mobile phones last year, up 55% from the previous year. But its operating margin slid to 3% in the fourth quarter from 13% in the third because of stiffer competition from the likes of Nokia Corp and Motorola Inc.

Encouraged by Samsung's performance, South Korean shares jumped 2.2% yesterday. Samsung's results also helped boost Taiwanese electronics shares. AP

http://www.bangkokpost.com/News/15Jan2005_news66.php

Its funny. I work at Intel and my boss just sent this exact article out to highlight that we need to grow profits more. Out staff was pretty surprised that they made more money than us or Msft.

Great job Samsung.

That's superb!!
samsung is a model for korean high tech companies, and its seriously dominating, good to see that
i hear its total revenue is more than that of several top japanese corporations combined, and only Toyota rivals samsung... making japanese executives shudder all over.
The great success is owed to good management i suppose, and superb marketing... wonder who the heroes are