Samsung has announced its earnings for Q1 2021, reporting a jump in revenue and operating profit. The company’s business boomed during the ongoing COVID-19 pandemic, thanks to strong demand for home appliances, smartphones, and TVs. However, the company also warned that its business could see a negative impact due to chip shortage.

The company’s revenue was KRW 65.4 trillion (around $59 billion) and operating profit of KRW 9.38 trillion (around $8.46 billion) in the quarter. The revenue was 18.2% higher and the operating profit was 45.5% higher compared to Q1 2020. Compared to Q4 2020, the revenue and operating profit were 6% higher and 4% higher, respectively.

Revenue and operating profits rose in Q1 2021 due to strong Galaxy S21, home appliances, and TV sales

Samsung’s smartphone division contributed the most to its business, thanks to strong sales of the Galaxy S21 series and the Galaxy A series. Sales of PCs, tablets, and wearables increased, too. The company’s consumer electronics division added KRW 1.12 trillion (around $1.01 billion) to the overall operating profit. The company expects to see solid demand for its foldable phones in the second half of this year. However, the overall smartphone sales are expected to decline in Q2 due to component shortage and no new flagship product launches.

The semiconductor manufacturing division’s operating profit was KRW 3.37 trillion (around $3.04 billion), the lowest Samsung has seen in years. While the demand for chips was high during Q1, the company spent a lot of capital on the expansion of its chip manufacturing facilities. Moreover, the power outage that hit its chip plant in Austin, Texas, had a big impact on its production. Samsung LSI, the company’s logic chip division, saw increased sales of Exynos processors and ISOCELL camera sensors. However, its earnings remained flat as it scrambled to procure display driver chips from the Austin chip plant.

In the second quarter, the company expects higher earnings from its semiconductor division as it expects to see strong demand for memory and storage chips for 5G products, servers, and PCs. Samsung LSI is also said to cooperate better with Samsung Foundry, and it will also outsource some manufacturing to other firms.