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Samsung Q1 Profit To Jump 46% From Chip Boom

Ahead of Friday’s earnings guidance, Samsung Electronics is tipped to post a ~46% increase in quarterly profit, driven by an unprecedented boom in the global memory chip market.

Known for its dominance in the memory chip industry, Samsung is forecast to post another near record result. While memory chip sales have dropped from last year’s high, cost cutting efficiencies are expected to propel profit growth.

Samsung Electronics’ semiconductor business is said to represent nearly three quarters of overall operating profit. According to Reuters analysts, the company records 70c operating profit for each $US1 DRAM chip sold.

Thomas Reuters analysts expect Samsung Electronics to post a 46% increase in operating profit for Jan-March, notching 14.5 trillion won (~A$18 billion).

Analysts expect Samsung’s chip business to contribute 10.7 trillion won in operating profit. By contrast, the sector notched an operating profit of 9.9 trillion won for the same period last year.

Consensus is, Samsung Electronics’ burgeoning chip business will outweigh any decline in electronics sales or component parts.

As previously reported, the South Korean giant shipped lower than expect OLED panels, following lower than expected sales of the iPhone X.

According to Strategy Analytics, during the quarter Samsung shipped 9.3 million units of its new Galaxy S9 smartphones.

The impact of the company’s new flagship smartphones will be revealed at Samsung’s earnings guidance on Friday.

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