Reuters file photo: The logo of Samsung Electronics is seen in its office building in Seoul, South Korea, August 25, 2017. Reuters / Kim Hong-ji / File photo
By Joyce Lee
CEO (Reuters) – Samsung Electronics (OTC:) Co. Ltd could make its best quarterly profit and record earnings in three years, with memory chip prices rising and its new foldable smartphone selling fast, analysts predict.
The operating profit of the world’s largest memory chip and smartphone maker probably rose 16.1 trillion won (14 14 billion) in the quarter ended September, according to a Refinitiv SmartEstimate by 16 analysts, who are consistently more accurate towards them.
Which will increase 30% from 12.35 trillion wins a year ago and the highest since the third quarter of 2018.
The unprecedented global shortage of semiconductor chips in the epidemic has reduced the results and shares of Samsung (KS :), which rose 45% last year and reached record highs in early 2021.
But stocks fell in September, rising further due to losses in September when U.S. peer micron (Nasdaq 🙂 warned that shipments of its memory chips would slip in the near future, in view of the industry that chip prices would rise in July-September.
“Sun’s shares have fallen because of Micron’s guidance, but unlike Micron, Samsung has internalized key components … and there are other businesses, such as mobile and foundry,” said Lee Sun-hook, a Hanwa Investment and Securities analyst.
“The price of memory (chips) is set to rise again next year after a short-term decline,” Lee added.
Samsung will announce preliminary results on Friday.
Chip section, smartphones
Samsung’s chip division is likely to report operating profit of 9.9 trillion won, which averages six analysts’ forecasts, which is 79% higher than a year ago, helped by rising memory chip prices and shipments.
The price of DRAM chips used in servers, mobile phones and other computing devices rose 7.9% compared to the June quarter, while the price of NAND flash chips serving the data storage market rose 5.5%, according to research provider Trendforce.
Analysts predict double operating margins for Samsung’s chip contract manufacturing business as clients rush to secure production capacity.
Its mobile division probably saw about 7.7 trillion wins in operating profit, down from 45.45 trillion wins a year ago, but more than the 2.2 trillion wins in folding smartphone sales in the previous quarter, analysts say.
Jane Park, a senior research analyst at Counterpoint, said that since its launch in late August, an estimated 2 million Galaxy Z Fold and Z Flip models have been sold, with South Korea topping the list.
Market participants will be excited for an update on Samsung’s planned 17 17 billion U.S. semiconductor plant later this month as sources say it is nearing completion of construction.
($ 1 = 1,187.9300 won)
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