It is likely that Samsung will report its best Q4 earnings on strong chip demand to Reuters

Author: Joyce Lee

SEOUL (Reuters) – Samsung Electronics (OTC 🙂 Co Ltd is likely to make a record profit in the fourth quarter thanks to strong demand for server memory chips and higher contract manufacturing margins, analysts estimate. The world’s largest operating chip and smartphone maker’s operating profit was likely to be 15.2 trillion won ($ 12.7 billion) in the quarter ended December, according to a 14 analyst’s Refinitiv SmartEstimate, weighed for more accurate data. That would rise 68% from the 9.05 trillion earned a year earlier and surpass the previous Q4 profit record of 15.15 trillion reported in 2017.

Shares of Samsung (KS 🙂 Electronics have risen about 12% in the past two months, predicting a rise in memory chip prices this year, driven by new data centers and demand for video, gaming, conferencing and other streaming services.

“Contrary to previous concerns, it is likely that the semiconductor industry will see significant growth in demand from non-memory and non-memory customers,” said Jeff Kim, an analyst at KB Securities.

“Since December, major North American data center companies such as Amazon (NASDAQ :), Microsoft (NASDAQ 🙂 and Meta have steadily increased their memory chip demand … And it looks like Samsung’s foundry business is two years old. has gained value by 2023 applications “.

This outlook was matched by stronger-than-expected results in December from its peer-reviewed Micron Technology Inc. (NASDAQ:) and positive outlook for the next quarter.

Samsung’s chip-based manufacturing business, which competes with Taiwan Semiconductor Manufacturing Co. (TSMC), also improved its profitability compared to the previous quarter, reaching an operating margin of 10% to 20% due to higher deliveries and higher prices, analysts said. as they say.

Samsung’s overall Q4 chip profit is expected to reach 9.7 trillion won, more than double the previous year’s 3.85 trillion profit, according to the average forecast of five analysts.

South Korea’s tech giant will deliver preliminary results on Friday.

For Samsung’s mobile business, which recently merged into a single division of Device Experience (DX) with TVs and home appliances, analysts said shipments were likely to rise slightly more than in the previous quarter to alleviate component shortages.

The mobile business probably had an operating profit of around 3 trillion won, about 24%, according to the average forecast of five analysts.

Market participants will tune in to Samsung’s full results later this month for an up-to-date impact on its Xian NAND flash chip manufacturing facility after the company said it would temporarily adjust COVID-19’s restrictions in the Chinese city.

The data company TrendForce said that last week Samsung’s Xian plant was being manufactured without major interruptions at the moment.

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