Samsung Electronics Likely to Ride Chip Demand to Post Highest Q1 Profit Since 2018


Samsung Electronics is probably going to submit its highest first-quarter revenue since 2018, analysts’ estimates confirmed, pushed by brisk income on reminiscence chips as stable demand helped to maintain costs firmer than anticipated.

Working revenue for the world’s greatest smartphone and reminiscence chip maker possible hit KRW 13.3 trillion (roughly Rs. 82,750 crore) within the quarter resulted in March, in accordance to a Refinitiv SmartEstimate from 13 analysts, which is weighted towards those that are extra persistently correct. That may be up 41 p.c from KRW 9.38 trillion (roughly Rs. 58,370 crore) a yr earlier and the best revenue for its comparatively sluggish first quarter since 2018.

The South Korean tech big will announce preliminary outcomes on Thursday.

Samsung’s Q1 chip revenue is probably going to attain KRW 7.6 trillion (roughly Rs. 47,290 crore), greater than double the earlier yr’s KRW 3.37 trillion (roughly Rs. 20,970 crore), in accordance to a median forecast of six analysts.

Its chip enterprise contributes about half of the tech big’s income.

Chip costs held up higher than anticipated within the first quarter, analysts mentioned, regardless of pulling again after a surge over the previous yr when purchasers constructed up shares to guard towards provide chain bottlenecks. They famous that sturdy demand and cautious funding spending had given a lift to the sector.

“Solid chip demand from data centres, chipmakers’ conservative investment to defend against falling prices, and high-end product sales have limited the decline in memory chip prices,” mentioned Doh Hyun-woo, analyst at NH Funding & Securities.

Samsung’s cellular enterprise revenue is estimated at KRW 4.04 trillion (roughly Rs. 25,140 crore) in accordance to a median forecast of six analysts, barely down from the earlier yr’s KRW 4.39 trillion (roughly Rs. 27,320 crore) however above its cellular income throughout the identical interval in 2017-2020.

Samsung launched its flagship Galaxy S22 smartphone in February, which possible offered about 8 million models throughout the first quarter in accordance to Greg Roh, head of analysis at Hyundai Motor Securities.

Samsung has the most important share of Russia’s smartphone market at about 30 p.c, however Roh mentioned a halt in shipments there would have little impact since Russia and Ukraine account for less than an estimated 2 p.c of Samsung’s whole, and this might be offset by gross sales to different areas.

Samsung mentioned in March that shipments to Russia had stopped after the invasion of Ukraine, though companies corresponding to Samsung Pay proceed to be provided in Russia in accordance to social media messages. Samsung shares have fallen about 12 p.c year-to-date, damage by worries over the influence of the Ukraine disaster on international tech system demand and considerations about low manufacturing yields at its cutting-edge contract chip manufacturing operation.

Samsung’s co-CEO final month addressed shareholder considerations about its manufacturing processes for chips with 5-nanometre or narrower circuitry, saying they have been steadily bettering.

© Thomson Reuters 2022




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