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(Bloomberg) -- Samsung Electronics Co. is stepping up spending on advanced chipmaking technology as it sees growing demand for its smartphones, displays and memory products.
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South Korea’s biggest company reported 43.6 trillion won ($36.3 billion) in semiconductor capital expenditure in 2021, eclipsing rivals as it acquired extreme ultraviolet lithography (EUV) machines to pursue aggressive expansion of its most lucrative memory and system chipmaking. It expects a recovery in server and PC memory demand and said foldables are already helping its sales growth, though declined to offer a forecast due to the high degree of uncertainty around supply chains and the pandemic.
Samsung had another quarter of record sales in the final three months of the year, with net income rising to 10.64 trillion won, according to a statement Thursday. Analysts had predicted 11.1 trillion won on average, according to estimates compiled by Bloomberg. Operating profit improved by 50% and sales were up 23%. The company paid special bonuses to employees in late December.
Shares fell as much as 2.7% in Seoul on Thursday, less than the wider KOSPI index, which was down 3.4%.
A consistent theme across Samsung’s business divisions was rising demand matched by increasing expenses that undercut profitability. Foldables pushed mobile sales up, but Samsung spent more on marketing. The foundry division that makes chips for outside customers set a quarterly record, but the outsize spending on ASML Holdings NV’s pricey EUV machines clipped profits.
The rising costs of raw materials and logistics affected margins in the consumer electronics business, which also set a new quarterly sales high, and Samsung expects that situation to persist through 2022.
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Samsung and memory-making rival SK Hynix Inc. fell in the latter half of last year on fears about price volatility, rising inventories and a cyclical downturn. Price drops proved more moderate than expected, however, as chip usage broadened across industries and memory makers took preemptive steps to stabilize supply and forestall price shocks. Samsung’s foundry business -- producing chips for customers without their own semiconductor plants -- is also helping stabilize revenues.