Analysts’ ratings show that Samsung Electronics is making its best quarterly profit and record revenue in three years, with the memory chip price hike and the vibrant sales of its new foldable smartphones.
Operating profit for the world’s largest memory chip and smartphone maker is expected to soar to KRW of 16.1 trillion (approximately Rs 10,000 crore) in the quarter ending September, according to 16 analysts’ Refinitive SmartEstimate.
That is KRW 12.35 trillion (approximately Rs. 77,300 crore), up 30 per cent from a year earlier and higher in the third quarter of 2018. Revenue rose 11 per cent to Rs 74.6 trillion (approximately Rs 4,67,000 crore), a record high.
An unprecedented global shortage of semiconductor chips in the midst of the epidemic backed Samsung’s results and stocks, which rose 45 percent last year to a record high in early 2021.
But in September the stock fell as US shareholder Micron warned that its memory chip exports would soon decline.
“Samsung shares have fallen due to Micron’s guidance, but unlike Micron, Samsung absorbs key components … and there are other businesses that are improving performance, such as mobile and foundry,” said Lee Soon-Hawk, a Hanwa investment and securities analyst.
“Memory (chip) prices will recover after a short-term decline next year,” Lee added.
Samsung will announce the initial results on Friday.
Chip segment, smartphones
Samsung’s chip division is expected to post an operating profit of KRW 9.9 trillion (approximately Rs 61,970 crore), an average of six analysts’ estimates, up 79 per cent year-on-year, contributing to memory chip prices and exports.
Prices of tram chips used in servers, mobile phones and other computing devices rose 7.9 percent against the June quarter, while NAND flash chips, which serve the data storage market, rose 5.5 percent, according to data from research provider Trendforce.
Analysts also predict a double-digit operating margin for Samsung’s chip contract product business as customers rush to get productivity.
Its mobile segment may have seen an operating profit of KRW 3.7 trillion (approximately Rs. 23,160 crore), analysts said, adding that KRW had slashed KRW to $ 4.45 trillion (approximately Rs. .
With over 2 million Galaxy Z Fold 3 and Z Flip 3 models sold in a month launched in late August, South Korea tops the list in sales, said Jen Park, senior research analyst at Counterpoint.
Sources said market participants were pushing for Samsung’s full decision to finalize construction later this month for the renovation of its planned $ 17 billion (approximately Rs 1,26,800 crore) US semiconductor plant.
© Thomson Reuters 2021