Slowed component shipments from sluggish demand in smartphones and fall in chip and display panel prices ate into Samsung's balance sheet for Q4 2015, while burgeoning demand for premium TV sets and consumer products helped to offset losses in the electronics giant. The company?s operating profit in the fourth quarter ended December jumped 16.15 percent to 6.14 trillion won on sales of 53.32 trillion won, up 1.11 percent on year. Net income during the period was pared to 3.22 trillion won from 5.35 trillion in the same quarter last year.

For full 2015, the company recorded a net profit of 19.06 trillion won, down 18.51 percent from 2014, and operating income of 26.41 trillion won, up 5.55 percent, on sales of 200.65 trillion won. Although sales decreased 2.69 percent, the company was able to defend a sales threshold above 200 trillion won for the fourth straight year thanks to brisk sales of premium consumer appliances that helped to offset its smartphone division and softer demand in the IT market and PCs.

Mobile business

Samsung said it shipped 97 million handsets -- including low-end feature phones -- and 9 million tablets in the holiday quarter.

The company plans to introduce two new versions of its Galaxy S models at the Mobile World Congress in Barcelona next month. The S7 phone will have a 5.1-inch front screen and the S7 Edge will have a 5.5-inch screen stretching down the sides.

For the first quarter of 2016, although slowing demand for smartphones and tablets is forecast due to seasonality, and in spite of slowing shipments of Samsung smartphones, Samsung expects that a product mix with the introduction of new line-ups, such as the Galaxy A (2016) series, will help stabilize sales and profitability.

As for the outlook for 2016, Samsung expects single-digit percentage growth in both the smartphone and tablet categories amid softening demand and intensifying competition. The company will focus on increasing smartphone shipments and maintaining a double digit margin through releases of competitive devices and an optimized product portfolio.

As for tablets, quarterly shipments and sales increased due to seasonal demand and steady sales of the Galaxy Tab A and Tab S2.

Display Panels

Samsung's Display Panel segment posted KRW 6.53 trillion in consolidated revenue and KRW 300 billion in operating profit for the quarter. Operating income from displays fell 36 percent.

In the fourth quarter, the LCD panel segment saw a earnings decline QoQ due to a decrease in shipments of large-size panels and continued decline in Average Selling Price (ASP). For OLED panels, positive factors such as increased shipments and improved line utilization were hampered by a decline in ASP brought on by an expansion in the proportion of mid- to low-end panel sales.

The company plans to secure mid- to long-term growth momentum by leveraging its OLED technology for the development of new panel applications such as transparent, mirror, head-mounted and automotive displays, while strengthening its flexible display technologies.

Premium TVs and Home Appliances

Samsung's Consumer Electronics Division - encompassing the Visual Display (VD), Digital Appliances (DA), Printing Solutions and Health & Medical Equipment (HME) businesses - posted KRW 13.85 trillion in consolidated revenue and KRW 0.82 trillion in operating profit for the fourth quarter.

In the fourth quarter, TV market demand increased entering the year-end peak season. Earnings for the VD Business showed strong growth QoQ, led by promotional sales such as Black Friday in North America, and increased sales of premium products such as SUHD TVs.

As the TV market is expected to grow this year, riding on global sporting events including the Olympics, Samsung will continue to focus on securing profitability by actively expanding its SUHD TV line-up, while increasing sales of premium products such as curved TVs and large-size TVs that are 60 inches or above.

In the first quarter, however, as TV demand enters a period of weak seasonality, the company will concentrate on introducing the new line-up of SUHD TVs.

For the appliances business, earnings improved QoQ led by continued market growth in North America and increased sales of premium products.

Looking ahead in 2016, as growth in the appliances market is expected to slow, Samsung will concentrate on improving its performance by increasing sales of premium products such as the Family Hub refrigerator and expanding the enterprise business including air conditioners.

Differentiated Chips

Samsung's Semiconductor business registered KRW 2.80 trillion in operating profits - up by 3.7 percent - on consolidated revenue of KRW 13.21 trillion for the quarter.

In the fourth quarter, weak demand across certain markets, including PCs, impacted the Memory business?s overall revenue, but sales of mobile and server DRAM were solid.

Growing demand for solution products helped lift NAND demand for high-density mobile devices and enterprise SSD for servers and PCs that require greater storage.

System LSI?s profits improved QoQ, driven by the 14-nm foundry business, despite weaker seasonal demand for SoC and LSI (Large-Scale Integration) chips.

Looking ahead in 2016, demand for memory chips will increase due to growth in contents stored in high density servers featuring DRAM and SSD, as well as smartphones with more advanced features.

Samsung will expand 20-nm process migration and develop 10-nm class process in DRAM. For NAND, production of third-generation V-NAND and SSD products will be expanded to enhance competitiveness. In System LSI, Samsung will continue pursuing customer diversification and expanding its product line-up to achieve long-term growth.

Demand for memory chips in the first quarter of 2016, which is a traditionally weak season, will be soft but Samsung will focus on profitability by lifting sales of high density DRAM and NAND storage products, and strengthening cost competitiveness by expanding 20-nm DRAM and third-generation V-NAND production.

Moreover, Samsung will further boost product competitiveness by beginning mass production of second-generation 14-nm process and supplying chips for new premium smartphones.

Samsung said this month that its foundry business received orders from Qualcomm to make Snapdragon 820 chips. It?s decided to use Qualcomm?s chips for about half of its upcoming S7 devices only a year after turning away from the U.S. company.