Tech Bulletin: Technology, Startups & Business News
Sci-Tech

Samsung expects 28pc raise in Q3 profit due to foldable phone sale

Samsung

Surging semiconductor prices and sales can raise company’s chip division’s operating profit in the third quarter by nearly 80 per cent yearly, Analysts

SEOUL: Korean technology giant Samsung Electronics said its third-quarter operating profit is expected to increase almost 28 percent from a year ago, driven by the sale of its new foldable smartphones and surging memory chip prices and demand.

The world’s biggest smartphone and memory chip maker reported an operating income of 15.8 trillion Korean won ($13.3 billion) in the three months ending September 30, according to the company’s preliminary results.

It is lower than the Refinitiv SmartEstimate of 16.1tn won but the highest quarterly profit since the third quarter of 2018 when Samsung posted a profit of more than 17.5tn won.

The company’s sales during the July-September period jumped more than 9 per cent on an annualised basis to 73tn won.

Samsung did not reveal its net income or details on the performance of its different divisions in its preliminary results.

Industry analysts said Samsung partially benefited from the pent-up demand for semiconductors or memory chips in the third quarter. They accounted for nearly half of the company’s operating profit in the first half of the year.

“Both revenue and operating profit [are] lower than our estimate, and market estimate,” SK Kim, executive director and senior analyst at Daiwa Capital Markets, told CNBC.

Samsung’s smartphone business was moderately affected by the global supply chain disruptions but increasing semiconductor prices are expected to boost the company’s components business, he added.

Surging semiconductor prices and sales can raise the company’s chip division’s operating profit in the third quarter by nearly 80 per cent yearly, according to analysts’ estimates. The company’s stock closed down 0.14 percent to 71,500 won on Friday after surging as high as 72,400 won earlier in the day. The company is expected to announce its detailed earnings on October 28.

Samsung’s chip contract manufacturing business, also known as foundry business, is expecting a huge boost in the coming months.

The company aims to start producing 3-nanometre chip designs in the first half of 2022 as it wrestles with Taiwan Semiconductor Manufacturing Company to enhance its market share. The new design will allow up to 35 per cent decrease in area, 30 per cent higher performance or 50 per cent lower power consumption compared to the 5nm designs, the company said.

Related posts