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Samsung Tips 52% Higher Profit on Server Chip Demand

Earnings at the South Korean company – the world’s largest producer of computer chips and smartphones – are likely to increase further this year


Samsung Electronics is developing a generative AI model for use on its handsets.
Samsung Electronics is developing a generative AI model for use on its handsets (Reuters file photo).

 

Samsung Electronics on Friday estimated its fourth-quarter profit jumped 52.5% due to surging demand for server memory chips and increasing orders for contract semiconductor manufacturing, despite lower prices.

Operating profit was projected at 13.8 trillion won ($11.5 billion) in the quarter ended December 31, lower than the 15.2 trillion won forecast by Refinitiv.

Sales were estimated at 76 trillion won, 23.5% higher than a year earlier.

Earnings at the South Korean company – the world’s largest producer of computer chips and smartphones – are likely to increase further this year after bottoming out in the first quarter, analysts said.

Chip prices are expected to rebound in the second quarter, partly due to reduced production at its plant in Xi’an, the Chinese city locked down due to a Covid-19 outbreak.

Expectations of a chip price recovery have pushed Samsung shares nearly 11% higher in the past couple of months.

Demand for new data centres and streaming services continues to increase with the resurgence of Covid worldwide.

Samsung shares rose 1.3% to 77,900 won in trading on Friday morning. The company  is due to release detailed earnings on January 27.

 

  • George Russell

 

 

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George Russell

George Russell is a freelance writer and editor based in Hong Kong who has lived in Asia since 1996. His work has been published in the Financial Times, The Wall Street Journal, Bloomberg, New York Post, Variety, Forbes and the South China Morning Post.