Samsung Electronics Likely to Ride Rising Chip Prices, Phone Sales to Report Best Quarterly Profit in 3 Years


Analysts expect Samsung Electronics to turn its best quarterly profit in three years and record revenue on rising memory chip prices and brisk sales of its new foldable smartphone.

Operating profit for the world’s largest memory chip and smartphone maker is likely to reach KRW 16.1 trillion (about Rs 10,000 crore) in the quarter ended September, according to a Refinitiv SmartEstimate, from 16 analysts, is weighted toward those who are consistently more accurate.

This will be 30 per cent higher from KRW 12.35 trillion (about Rs 77,300 crore) a year ago and the highest since the third quarter of 2018. Revenue rose 11 per cent to 74.6 trillion won (about Rs 4,67,000 crore), a record high.

Unprecedented global shortages in semiconductor chips are underscored amid pandemic Samsung’s Results and shares, which rose 45 percent last year and hit a record high in early 2021.

But the stock has declined since then, compounded with losses from US counterparts in September. micron Chip prices will drop after peaking in July-September amid industry fears that its memory chip shipments will slip in the near term.

“Samsung shares declined because of Micron’s guidance, but unlike Micron, Samsung internalizes key components … and has other businesses such as mobile and foundry,” said Hanwha Investment & Securities analyst Lee Soon-hak. “

“The memory (chip) prices are seeing a rebounding next year after a short period of decline,” Lee said.

Samsung will announce preliminary results on Friday.

Chip Division, Smartphones

Samsung’s chip division is likely to report operating profit of KRW 9.9 trillion (about Rs 61,970 crore), an average of six analysts’ forecast shows, up 79 percent from a year ago, helped by growth in memory chip prices and shipments. Got it.

Prices of DRAM chips used in servers, mobile phones and other computing devices rose 7.9 percent over the June quarter, while prices for NAND flash chips serving the data storage market rose 5.5 percent, research provider Trendforce shows. The data shows.

Analysts also forecast double-digit operating margins for Samsung’s chip contract manufacturing business as customers race to secure production capacity.

Analysts said its mobile division saw operating profit of around KRW 3.7 trillion (about Rs 23,160 crore), down from KRW 4.45 trillion (about Rs 27,840 crore) a year ago, but down from last quarter’s KRW 3.2 trillion (roughly Rs. 20,020 crore on sales of foldable smartphones).

An estimated 2 million Galaxy Z Fold 3 and Z Flip 3 models were sold in a month launch At the end of August, South Korea was the top selling market after the United States, said Jayne Park, senior research analyst at Counterpoint.

Market participants will scrutinize Samsung’s full results later this month for an update about Samsung’s $17 billion (about Rs 1,26,800 crore) US semiconductor factory, as sources said it will finalize construction. was coming closer.

© Thomson Reuters 2021

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