Models make a pitch for the Bespoke refrigerator at Samsung Electronics Digital City Premium House.

Samsung Electronics recorded an earnings surprise by logging 65 trillion won in sales and 9.3 trillion won in operating profit in the first quarter of this year.

The figures represent a 17.5 percent surge in sales and a 44.2 percent jump in operating profit compared to the same period a year earlier.

Samsung’s release of the premium flagship smartphone Galaxy 21 played a decisive role in achieving the earnings surprise.

Samsung Electronics announced its provisional business performance for the 1st quarter on April 7, but did not disclose each business sector’s results.

Securities industry sources estimated that the smartphone business segment earned some 4.6 trillion won, almost half of the electronics giant’s total operating profit.

Samsung Electronics’ rosy outlook for the second quarter is that chip prices, which spiked in earnest, will push the company’s annual operating profit to surpass 50 trillion won.

The smartphone segment’s success came on the back of Samsung Electronics’ strategy to move up the release of Galaxy 21, which worked.

The electronics company advanced the release of Galaxy 21 in late January, one month earlier than when predecessors made their debut each year.

The move, designed to check its rival Apple for big-ticket smartphones, as well as Chinese companies with low-priced competitors, paid off.

The global market survey firm Counterpoint Research reported that Samsung Electronics saw its share in the global smartphone market surge 23 percent in the first quarter of the year, up over 3 percentage points from a year earlier.

The domestic sales of Galaxy S21 topped 1 million units on March 26, only 57 days after it was released. Wearable products, such as the profitable wireless earbud Galaxy Buds, reportedly contributed to improving the company’s business performance.

Sales of “Bespoke Home” appliance items, tailored to meet consumers’ lifestyles, and premium QLED TV sets, rose dramatically in the first quarter. “Bespoke Home” home appliance products enjoyed popularity among newlywed couples.

The brand made its debut abroad. Securities companies estimated that the living home appliance and TV segment chalked up a combined 1 trillion won in operating profit.

The semiconductor sector, which served as a cash cow in recent years, posted 3.6 trillion won in operating profit for the Jan.-March period, falling short of 4.12 trillion won a year before. NAND Flash memory prices, which declined last year, had not yet risen enough.

Storms hit Samsung Electronics’ semiconductor plant in Austin, Texas, in the United States, in February, suspending its operation for more than one month and costing Samsung 300 billion won in damages.

The company expensed huge costs in restoring the operation of the plant and replacing materials and chemical agents.

Securities companies predicted that Samsung Electronics will see its operating profit for the second quarter of the year surge again, this time on the back of rising semiconductor prices.

Chances are high that DRAM and NAND Flash memory prices have begun to rise in earnest, likely repeating of the memory chip super cycle for a long-term boom during the period between 2017 and 2018.

Furthermore, as global shortage in semiconductors grow, the company will likely see its foundry business improve its profitability down the road.

A view of Samsung Electronics’ Galaxy S21 and Galaxy S21 Ultra smartphones.

On the other hand, Samsung Electronics is forecast to see the smartphone segment drop due to the declining effects of the release of the new smartphone Galaxy S21.

Securities companies predicted that the company would see its operating profit reach more than 10 trillion won in the second quarter and a maximum of 50 trillion won for the whole of this year.