As businesses report their financial performance for the first quarter of 2022, Supply Chain Matters continues with highlights of select bellwether firms that can be considered a relatively good indicator of ongoing industry supply chain challenges and how senior executives are anticipating some forms of stability.

In a prior posting, we highlighted recent financial results and perspectives for the 3M Company. In this posting, with focus on Samsung Electronics.

Samsung Electronics can often provide a meaningful bellwether for ongoing conditions across global semiconductor, high tech and consumer electronics supply networks. Samsung is considered to be one of the largest global producers of either end-item smartphones and consumer electronic appliances, along with  electronic components such as semiconductor and memory chips, electronic screen displays, and other premium electronics utilized by other companies in their supply network needs.

This week the South Korea headquartered company reported quarterly financial results for the March 31 ending first quarter. Performance reportedly topped equity analyst expectations while posting a record consolidated revenue for the third consecutive quarter. Total revenues increased 19 percent on a year-over-year basis, operating profit increased 51 percent while net profit grew 59 percent.

Computer Memory

The company’s Memory business, long considered a cash cow, reportedly achieved a record-high in quarterly sales. According to reporting from The Wall Street Journal, memory prices across the industry have stopped rising, interpreted as a sign that supply is catching up with global demand, but Samsung has been able to continue to garner attractive results. The company anticipates robust sales of memory  utilized in computer servers to continue to fuel profits for the remainder of this year.

Contract Semiconductor Fabrication

The company’s semiconductor contract fabrication business reportedly recorded its highest-ever quarterly sales volume and indicated that chip demand would continue to exceed supply for the remainder of 2022. Quarterly revenue in the semiconductor business reportedly rose 39 percent while operating profitability increased 152 percent on a year-over-year basis. Noted was the company has increased orders for semiconductor fabrication needs in the HPC/Automotive segment while added investments in U.S. based fab facilities will help to respond to expected future demand.

Electronic Display

Samsung Display Corporation recorded record financial results as overall demand for mobile LCD displays from various smartphone producers drove revenues.

Revenue within the Visual Display Business reportedly increased year-over-year with higher sales of premium, high-value products such as Neo QLED and Super Big TVs.


Sales for the company’s smartphone segment were fueled by the recent launch of the Samsung Galaxy S22 model launched in February. Noted was that global demand is 20 percent higher for this model, vs. the predecessor model.


Global Supply Chain Outlook

Samsung indicated in its earnings release that macroeconomic and logistics issues stemming from high rates of inflation and the Russia-Ukraine conflict are expected to persist in Q2, raising production costs and dampening consumer sentiment. However, the company noted an expectation that component shortages would improve, helping to sustain component demand levels in the remainder of this year.

The company indicated a belief that computer server demand will remain relatively solid in thru the second half of this year, but the pace of which component shortages are resolved will require constant monitoring.

Regarding overall supply chain perspective, noted was the following:

The Company also aims for sustainable growth based on diverse product segments, ranging from smartphones to IT, automotive, gaming, and wearables, by capitalizing on its competitive edges in SCM capabilities and new technology development. In particular, in order to secure a solid OLED position in the fast-growing EV market, Samsung will focus on offering a full lineup of solutions spanning from rigid to foldable displays.

Samsung anticipates that for Q2, smartphone market demand will decline slightly on a quarter-on-quarter basis amid continued seasonal effects and uncertainties over COVID-19 and geopolitical issues.

The company’s stated perspective on the TV and consumer electronics industry in the second half of this year was expressed as:  “In response to persistent issues with raw materials and logistics, the Company plans to further optimize operations by establishing sales and supply pans further down in advance.Supply Chain Matters interprets that to imply that overall material planning windows have been extended as a means to address needed resiliency and agility of available supplier sources and in factoring elongated global transport times.


Worker Activism

A final thought related to supply chain challenges relates to a previous Supply Chain Matters posting in March which highlighted a report from The Wall Street Journal, citing informed sources and indicating that Citing informed sources, the report indicates that nearly half of the global workforce, from semiconductor engineers to product designers, are seeking the largest base-salary increase in this company’s history. Staff members point to continued strong revenue growth and a more than 50 percent increase in profitability as justification for added salary and benefit demands. The latest record Q1-2022 financial performance is likely to add to worker activism efforts. In 2021, Samsung workers sought a base pay increase of 6.3 percent before both sides agreed to a 4.5 percent base pay increase plus added incentives tied to employee’s performance.

The global tech giant began to formally recognize labor organizing groups last year, but membership influence remains small. The Journal report noted a history of senior executives shunning labor organizing efforts.



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