Samsung Electronics’ profit soars on demand for chips

© Archyde.com / Kim Hong-Ji
The Samsung Electronics logo on its office building in Seoul

By Joyce Lee and Heekyong Yang

SEOUL, Jan 7 (Archyde.com) – Samsung Electronics Co Ltd said on Friday its fourth-quarter operating profit likely jumped 52% compared to a year earlier, reaching the highest level for the quarter in four years, helped by the strong demand for server memory microprocessors and the highest margins in contract chip manufacturing.

The world’s largest memory chip and mobile phone maker estimated October-December profit at 13.8 trillion won ($ 11.5 billion), marking the tech giant’s biggest fourth-quarter operating profit since Q4. of 2017.

The result fell short of a Refinitiv SmartEstimate estimate of 15.2 trillion won, which analysts attributed to things like employee bonuses, ‘marketing’ costs for its mobile business, and start-up costs for mobile phones. new farm monitors that were included in the quarter.

“It seems surprising because the figure was lower than consensus, but I don’t think it is as bad as it seems. It seems that they have reflected various costs in the fourth quarter,” said Park Sung-soon, an analyst at Cape Investment & Securities.

“At this time it is not clear if there were changes to the expected chip shipments,” added Park.

Revenue likely increased 23% from the same period last year to 76 trillion won, the company said in a brief preliminary earnings release, in line with market expectations.

Samsung will publish its detailed results on January 27.

Although memory chip prices fell during the quarter, increased demand from server customers boosted Samsung’s quarterly shipments of both DRAM chips, widely used in data centers, and flash memory chips. NAND, used for data storage on technological devices, according to analysts.

Shares of Samsung were up 1.3% in morning trading.

(1 dollar = 1,204,0400 won)

(Information from Joyce Lee and Heekyong Yang; additional information from Choonsik Yoo; edited by Richard Pullin, translated by José Muñoz in the Gdansk newsroom)