Samsung flags 50% jump in Q1 profit on solid chip demand

Samsung estimated a first-quarter profit at 14.1 trillion won (S$15.7 billion). PHOTO: REUTERS

SEOUL (REUTERS) - Samsung Electronics on Thursday (April 7) reported a 50 per cent jump in quarterly operating earnings to post its highest first-quarter profit since 2018, as solid demand underpinned prices for memory chips.

The world’s largest memory chip and smartphone maker estimated first-quarter profit at 14.1 trillion won (S$15.7 billion), compared with a Refinitiv SmartEstimate of 13.3 trillion won.

Revenue likely rose 18 per cent from the same period a year earlier to a record 77 trillion won, the company said in a short preliminary earnings release, also above market expectations.

Samsung is due to release detailed earnings on April 28.

Although chip prices dipped in the first quarter, analysts said they had held up better than expected due to solid demand as well as cautious investment spending by chipmakers and limited capacity expansion. This buoyed Samsung’s chip earnings, which make up about half of its total profits.

The price of one type of Dram chip, widely used in data centres, fell 8 per cent during the quarter, according to data provider TrendForce, while the prices of Nand flash memory chips, used for data storage in tech devices, fell between 5 per cent and 10 per cent.

Analysts expect Dram prices to continue to fall in the April to June quarter as rising inflation could potentially hurt demand for PCs, laptops and smartphones.

However, a raw material contamination in February at a Nand flash memory chip plant owned by Japan’s Kioxia and American firm Western Digital is expected to drive up Nand flash prices by 5 per cent to 10 per cent, offsetting the effects of modestly high inventories maintained by buyers, TrendForce said.

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