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Samsung likely to announce a 38 percent profit surge

by on06 July 2021


While the world apparently suffered during the Coronavirus, big tech generally seems to have done very well out of it.  Samsung is expected to see a 38 percent surge in profit for the April-June quarter thanks to strong chip prices and demand spurred by a pandemic-led consumer appetite for electronics as well as recovering investment in data centres.

Operating profit for the world's biggest memory chip and smartphone maker likely jumped to $10 billion, according to a Refinitiv SmartEstimate drawn from 20 analysts and weighted toward those who are more consistently accurate.

Samsung’s strong performance - coming despite it shipping fewer smartphones than in January-March - underscores the stratospheric demand for chips that has depleted stockpiles and filled production capacity.

The result would be up 20 percent from the first quarter and mark Samsung's highest operating income for the second quarter since 2018. Revenue likely rose 15.4 percent.

Samsung is scheduled to announce preliminary second-quarter results tomorrow.

The company's chip division likely benefited from memory chip price hikes that exceeded market estimates, analysts said, while shipments grew as well.

Prices of DRAM chips, widely used in servers, mobile phones and other computing devices, are expected to have jumped 27 percent compared to the March quarter, while those of NAND flash chips that serve the data storage market rose 8.6 percent

Profit also improved at Samsung's chip-contract manufacturing and logic chip design business, partly because operations at its storm-hit Texas factory returned to normal, analysts said.

They estimated the chip division's operating profit in April-June rose about 22 percent from the year-earlier period.

Still, Samsung's smartphone shipments dropped to about 59 million in April-June from about 76 million in the first quarter as sales slowed for its latest flagship model, launched in mid-January.

Reduced demand from India, hard hit by the pandemic during the quarter, as well as tight supply for some mobile processor chips, may also have affected shipments, analysts said.

Last modified on 06 July 2021
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