Samsung Electronics is tipped to post an almost nine-fold increase for first quarter profit, from one year earlier.
This is expected to happen after rebounding semiconductor prices lift earnings, following a severe chip downturn. Samsung’s chip division, usually its largest earner, is expected to report a profit of around 750 billion won (approx. A$8.42 billion). This will be its first quarterly profit in five quarters, according to an average estimate from 12 analysts.
According to an average calculated by LSEG SmartEstimate, the company’s operating profit has likely risen to 5.7 trillion won (approx. A$6.41 billion) for the quarter ending March 31.
If this is the case, it would be Samsung’s highest profit since Q3 2022, compared to an operating profit of 640 billion won (approx. A$7.19 billion) in Q1 2023.
Memory chip prices have rebounded after a tough era that began in mid-2022, due to weak post-pandemic demand.
In the first quarter, memory chip prices rose by around 20%, compared with the previous quarter for DRAM chips, and 23- 28% for NAND Flash chips.
What seems to be an optimistic overview of the future of memory chips, including demand for chips like high-bandwidth memory, has driven a 29% increase in the company’s shares over the last year.
The chip design and chip contract manufacturing businesses at Samsung are still unsuccessful, according to analysts. However, memory chipmakers have had limited supply of lower margin chips since the downturn, and buyers are restocking inventory.
Samsung’s mobile business is said to be reporting an operating profit of about 3.8 trillion won (approx. A$4.27 billion), which is just below the profit of a year ago, 3.94 trillion won.
The latest device from the company, the Galaxy S24 smartphones, started retailing at the end of January, complete with AI functions.
This resulted in Samsung shipping an estimated 57 million smartphones in Q1, an increase of 8% compared to the previous quarter.
The average selling price also rose 30% quarter-on-quarter, which has also supported profits.
The preliminary Q1 earnings result is expected to be announced this week, and full figures will follow later this month.
