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Samsung Electronics is likely to take advantage of the demand for chips and show the highest profit in the first quarter since 2018

Analysts estimate that Samsung Electronics is likely to record its highest first-quarter profit since 2018 thanks to strong memory chip earnings, as robust demand helped keep prices higher than expected.

The world’s largest smartphone and memory chip maker’s operating income is likely to reach 13.3 trillion won (roughly Rs. 82,750 crore) in the quarter ended March, according to the Refinitiv SmartEstimate by 13 analysts, which targets those who are more consistently accurate. It will be 41 percent more than 9.38 trillion won (roughly Rs. 58,370 crores) a year earlier and the highest profit in a relatively sluggish first quarter since 2018.

The South Korean tech giant will announce preliminary results on Thursday.

According to the median forecast of six analysts, Samsung’s chip profit in the first quarter is likely to reach 7.6 trillion won (approximately Rs. rupees).

Its chip business generates about half of the tech giant’s profits.

Chip prices held up better-than-expected in the first quarter, despite a decline after a sharp rise last year as customers piled on inventories to hedge against supply chain bottlenecks, analysts said. They noted that strong demand and prudent investment spending have given a boost to the sector.

“Strong demand for chips from data centers, conservative investment by chipmakers to protect against falling prices and sales of high-end products have capped the fall in memory chip prices,” said Do Hyun-woo, an analyst at NH Investment & Securities.

Samsung’s mobile business profit is estimated at 4.04 trillion won (roughly Rs. 25,140 crore), according to the median forecast of six analysts, slightly lower than the previous year’s profit of 4.39 trillion won (roughly Rs. 27,320 crore), but higher than mobile revenue over the same period. period 2017-2020

Samsung launched its Galaxy S22 flagship smartphone in February, which Greg Roh, head of research at Hyundai Motor Securities, likely sold about 8 million units in the first quarter, according to Greg Roh.

Samsung has the largest share of the Russian smartphone market at around 30 percent, but Ro said the shutdown wouldn’t have much of an impact as Russia and Ukraine only account for about 2 percent of Samsung’s total sales and that would be offset by sales to other countries. regions.

Samsung said in March that shipments to Russia had ceased following the invasion of Ukraine, although according to social media posts, services such as Samsung Pay continue to be offered in Russia. Samsung shares have fallen about 12 percent since the start of the year on worries about the impact of the Ukrainian crisis on global demand for tech devices and worries about poor productivity at its advanced contract chip manufacturing.

Last month, Samsung’s co-CEO addressed concerns to shareholders about 5nm or narrower chip manufacturing processes, saying they are gradually improving.

© Thomson Reuters 2022

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