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Samsung Electronics posts record revenue in China in 1st half

Samsung Electronics posts record revenue in China in 1st half

Posted August. 21, 2018 07:24,   

Updated August. 21, 2018 07:24


Samsung Electronics posted the largest revenues in China during the first half of this year. This marks the first time that the South Korean electronics giant has amassed more sales in China than in the United States.

According to Samsung’s semiannual report on Monday, the company posted a total 83.92 trillion won in sales in the first half of this year. The share of Chinese sales accounted for 27.41 trillion won (32.7 percent), surpassing the cut of the United States for the first time (21.79 trillion won).

Since it first entered the 20 percent range in 2014, Samsung Electronics’ revenues in China have been on the rise constantly growing from 23.4 percent in 2015, to 23.9 percent in 2016 and 28.3 percent in 2017. On the other hand, the revenue share of the United States, Samsung’s long-standing stronghold of sales, has been gradually falling from 31.8 percent in 2016 to 30.2 percent in 2017 and a meager 26 percent in the first half of this year. Experts attribute Samsung's sales growth in China to the spread of protectionism across the globe as well as a strain on the American and European markets, which used to have a strong demand for finished goods such as smartphones, televisions, and home appliances.

It was on the back of semiconductors that China has emerged as the largest market for Samsung. In the Chinese smartphone market, Samsung Electronics struggled against a fierce local competition, with its market share plummeting from 19.7 percent in 2013 (No. 1) to 0.8 percent in the second quarter of this year (No. 12). China, the largest consumer of semiconductor chips in the world, has made a massive purchase from Samsung, allowing the Korean tech giant to make up for the weak performance of smartphone business.

Huawei, the Chinese smartphone and telecommunications device maker, has become one of the five major revenue sources for Samsung Electronics for the first time. In the second quarter, Huawei surpassed Apple in terms of global smartphone market shares, chasing the leader Samsung Electronics from close behind. In the global telecommunications device market, Huawei tops the list with a 28 percent market share, with a significant difference from Samsung Electronics, which is ranked in the fifth. In a way, Samsung’s major rival company has become one of its primary clients. The share of revenues that Samsung Electronics has achieved from five clients such as Apple, Verizon, Deutsche Telekom, Techtronics, and Huawei hovers around a whopping 11 percent.

Some experts warn that a growing dependence on Chinese market will leave Samsung’s revenue base more susceptible to the whims of the Chinese government, which is aspiring to become a semiconductor powerhouse and launching antitrust probes into other chips makers. In June, China’s antitrust authorities launched an investigation into foreign semiconductor producers including Samsung Electronics, SK Hynix, Micron Technology, to check if the firms engaged in any illegal activities such as price fixing.

Dong-Jin Shin shine@donga.com