Samsung Electronics Co. Ltd. estimates that its revenue reached a record 76 trillion won, or about $63.1 billion, in the fourth quarter ended Dec. 31.

The South Korean electronics giant released its revenue estimate early today as part of its fourth-quarter earnings guidance. Samsung is expected to post its full earnings report later in January.

The 76 trillion won in revenue that the company achieved during the three months ended Dec. 31 represents a significant 24% improvement over a year ago. Even more impressive was the growth in Samsung’s operating profit, which jumped 52% year-over-year, to 13.8 trillion won. That’s the equivalent of about $11.4 billion.

Samsung’s operating profit fell short of the S&P Global Market Intelligence consensus estimate but its revenue exceeded expectations by about 1 trillion won, the Wall Street Journal reported. Multiple market developments are believed to have factored into the company’s earnings in the fourth quarter.

According to the Journal, it’s believed that Samsung’s smartphone business achieved “relatively solid” results in the three months through Dec. 31 thanks partly to the launch of the Galaxy Z Flip 3 and Galaxy Z Fold 3 foldable devices. The former device features a design inspired by a flip phone that allows it to fold horizontally into a compact rectangle. The Galaxy Z Fold 3 is a tablet that can be turned into a smartphone.

Samsung shared data about the growth of its foldable handset business in late December. The main highlight: The company’s 2021 foldable device sales quadrupled compared to 2020. Moreover, Samsung said the Galaxy Z Flip 3 is winning over customers from rival phone makers more effectively than its earlier Galaxy Note 20 tablet.

The company’s fourth-quarter earnings are also believed to have benefited from growth in its chip business. The company is the world’s top maker of NAND and DRAM chips. It also manufactures processors such as system-on-chip units for mobile devices.

Samsung’s chip business apparently was boosted by several business factors in the quarter, according to the Journal. Those included a lower-than-expected drop in the price of NAND and DRAM chips, as well increased profits from the company’s contract chip manufacturing division.

Samsung is making significant investments to maintain the growth of its chip business. In 2021, the company announced plans to spend the equivalent of about $205 billion over three years to grow several key businesses, including its chip group.

A portion of the capital that Samsung plans to invest into its chip business will be spent on the rollout of new three-nanometer processor production lines. The company estimates that its three-nanometer technology will facilitate the production of chips with up to 35% higher performance than five-nanometer silicon. Alternatively, chip designers will have the option to use the technology to create processors with 50% lower power consumption.

Samsung’s three-nanometer technology is likely to play a key role in the company’s efforts to continue the earnings momentum of its chip business amid mounting competition from rivals. The company’s three-nanometer process is based on a transistor design approach known as a gate-all-around architecture.

Rival Intel Corp. plans to implement gate-all-around transistors as well, though it’s expected to do so later than Samsung. Moreover, Intel recently launched a new division called Intel Foundry Businesses that will compete with Samsung in the contract chip manufacturing market.

Samsung’s investments in chip technology can also indirectly boost its smartphone business, another major contributor to its newly released preliminary results. The company uses a homegrown system-on-chip called the Exynos series to power a part of its smartphone line. Samsung’s chip investments, which include a partnership with Advanced Micro Devices Inc. for mobile graphics card technology, are helping to improve Exynos, thus making Samsung devices that use the chip series more competitive. 

Photo: DennisM2/Flickr