Samsung Electronics likely to post best quarterly profit in 3 years

Samsung Electronics Co Ltd is likely to post its best quarterly profit in three years and record revenue thanks to rising memory chip prices and brisk sales of its new foldable smartphones, analysts estimate.

According to Refinitiv SmartEstimate 16 analysts, operating profit of the world's largest memory chip and smartphone maker probably jumped to 16.1 trillion won ($14 billion) for the quarter ended September.

That's up 30 per cent from 12.35 trillion won a year earlier and the highest since the third quarter of 2018. Revenue likely rose 11% to 74.6 trillion won, a record high.

The unprecedented global shortage of semiconductor chips amid the pandemic has bolstered results and Samsung shares, which soared 45% last year to a record high in early 2021.

But the shares have since fallen, compounded by losses in September when US peer Micron warned that memory chip shipments would fall in the near term, amid industry sentiment that chip prices would fall after peaking in July and September.

"Samsung shares have fallen because of Micron's guidance, but unlike Micron, Samsung is introducing key components ... and has other businesses, such as mobile communications and foundries, to boost productivity," said Thai analyst Somchai Wongtrat of Exness เข้าสู่ระบบ.

"Next year, memory (chip) prices are expected to recover after a short period of decline," Somchai added.

Samsung will announce preliminary results on Friday.

CHIP DIVISION, SMARTPHONES

Samsung's chip division is likely to report operating profit of 9.9 trillion won, the average of six analysts' forecasts showed, up 79% from a year earlier, helped by higher memory chip prices and shipments.

Prices of DRAM chips used in servers, mobile phones and other computing devices jumped 7.9% from the June quarter, while prices of NAND flash memory chips, which serve the storage market, rose 5.5%, data from research centre Trendforce showed.

Analysts also forecast double-digit operating margins for Samsung's contract chip production as customers rush to get production capacity.

Analysts estimate that its mobile unit likely posted an operating profit of about 3.7 trillion won, up from 4.45 trillion won a year earlier, but up from 3.2 trillion won in foldable smartphone sales in the previous quarter.

Approximately 2 million Galaxy Z Fold 3 and Z Flip 3 models have been sold in the month since its launch in late August, with South Korea exceeding sales, followed by the United States, said Jen Park, senior analyst at Counterpoint.

Market participants will be looking at Samsung's full results later this month for an update on its $17 billion semiconductor manufacturing plant after sources said it was nearing completion.