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Chip Business Likely To Boost Samsung Electronics To Report Record Q1 Profits Since 2018

Chip Business Likely To Boost Samsung Electronics To Report Record Q1 Profits Since 2018
Samsung Electronics Co Ltd is projected to report its biggest first-quarter profit since 2018, according to analyst forecasts, propelled by strong memory chip profits as strong demand kept prices firmer than expected.
According to a Refinitiv SmartEstimate from 13 analysts, operating profit for the world's largest smartphone and memory chip maker likely exceeded 13.3 trillion won ($10.9 billion) in the quarter ended in March, which is weighted toward those who are more consistently correct.
That would be up 41 per cent from 9.38 trillion won a year ago, and it would be the company's largest first-quarter profit since 2018.
On Thursday, the South Korean IT behemoth will release early results.
According to an average projection from six analysts, Samsung's first-quarter chip profit will be 7.6 trillion won, more than double the previous year's 3.37 trillion won.
Its chip division accounts for around half of the company's profits.
Analysts said chip prices held up better than expected in the first quarter, despite a pullback from a year ago when clients stockpiled up supplies to avoid supply chain bottlenecks. Strong demand and cautious investment spending, they said, had boosted 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," said Doh Hyun-woo, analyst at NH Investment & Securities.
According to an average expectation from six analysts, Samsung's mobile business profit would be 4.04 trillion won, slightly lower than the previous year's 4.39 trillion won but higher than Samsung's mobile profits from 2017 to 2020.
According to Greg Roh, head of research at Hyundai Motor Securities, Samsung's flagship Galaxy S22 smartphone, which was released in February, sold around 8 million copies in the first quarter.
Samsung has roughly a 30 per cent share of Russia's smartphone market, but Roh said a halt in shipments there would have little impact because Russia and Ukraine account for only about 2 per cent of Samsung's total sales, and sales to other regions would compensate.
Samsung announced in March that shipments to Russia had ceased following the invasion of Ukraine, yet social media comments indicate that services like as Samsung Pay are still available in Russia.
Concerns over the impact of the Ukraine conflict on global electronic device demand, as well as low production yields at Samsung's cutting-edge contract chip manufacturing unit, have weighed on the company's stock.
Last month, Samsung's co-CEO responded to shareholder worries over the company's manufacturing procedures for chips with 5-nanometer or thinner circuits, stating they were improving steadily.

Christopher J. Mitchell

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