Samsung profit likely biggest in six quarters on higher chip prices
Send a link to a friend
[April 04, 2024] By
Joyce Lee
SEOUL (Reuters) - Samsung Electronics is expected to post a near
nine-fold increase in first-quarter profit from a year earlier as
rebounding semiconductor prices lift earnings from a low base caused by
a severe chip downturn.
Operating profit for the world's biggest maker of memory chips and TVs
likely rose to 5.7 trillion won ($4.24 billion) in the quarter ended
March 31, according to the average of an LSEG SmartEstimate from 27
analysts, weighted toward those who are more consistently accurate.
If so, it would be Samsung's highest profit since the third quarter of
2022. It compares with an operating profit of 640 billion won in the
first quarter last year.
This is because its chip division, traditionally its biggest earner, is
expected to report its first quarterly profit in five quarters of about
750 billion won, according to an average estimate from 12 analysts.
Memory chip prices have rebounded from a deep trough that began mid-2022
due to weak post-pandemic demand for gadgets that use the chips.
During the first quarter, memory chip prices jumped by about 20% versus
the previous quarter for DRAM chips used in tech devices and 23% to 28%
for NAND Flash chips used for data storage, according to data provider
TrendForce.
The bullish outlook for memory chip demand, including exploding appetite
for chips such as high-bandwidth memory (HBM) used in artificial
intelligence chipsets, has driven a 29% rise in Samsung shares over the
last 12 months.
![](http://archives.lincolndailynews.com/2019/Sep/05/images/ads/current/stclara_lda_SPONSOR_090519.png)
[to top of second column] |
![](../images/040424PIX/busine64.jpg)
A worker waters a flower bed next to the logo of Samsung Electronics
during a media tour at Samsung Electronics' headquarters in Suwon,
South Korea, June 13, 2023. REUTERS/Kim Hong-Ji/File Photo
![](http://archives.lincolndailynews.com/2024/Apr/04/images/ads/current/graue_lda_SFARM_2024.png)
Samsung's chip design and chip contract manufacturing businesses are
still loss-making, analysts said. But memory chipmakers have limited
supply of lower-margin chips since the downturn, while buyers are
restocking inventory, improving the tech giant's profits.
Meanwhile, its mobile business likely reported an operating profit
of around 3.8 trillion won, according to an average of forecasts
from 12 analysts, slightly below the unit's 3.94 trillion won profit
a year ago.
Samsung began selling its latest flagship Galaxy S24 smartphones at
the end of January, with a bevy of AI functions to compete with
rival Apple at the top end of the market.
This led Samsung to ship an estimated 57 million smartphones during
the first quarter, up 8% from the previous quarter according to
Eugene Investment & Securities.
The average selling price of Samsung smartphones also likely rose
30% to $340 quarter-on-quarter, supporting profits, Eugene said.
The tech giant will announce its preliminary first-quarter earnings
results on Friday before reporting full figures later this month.
($1 = 1,345.6000 won)
(Reporting by Joyce Lee; Editing by Jamie Freed)
[© 2024 Thomson Reuters. All rights
reserved.]
This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |