Samsung Electronics’ fourth-quarter profit jumps on server chip demand, foundry margins By Reuters

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© Reuters. FILE PHOTO: Samsung signage is seen at a store in Manhattan, New York, U.S. November 22, 2021. REUTERS/Andrew Kelly

By Joyce Lee and Heekyong Yang

SEOUL (Reuters) – Samsung Electronics Co Ltd said on Friday its fourth-quarter operating profit likely jumped 52% year-on-year to its highest level for the quarter in four years, helped by strong demand for chips server memory and higher margins in chip contract manufacturing. .

The world’s largest memory chip and smartphone maker estimated October-December profit at 13.8 trillion won ($11.5 billion), which would be the giant’s highest operating profit. technology in the fourth quarter since the fourth quarter of 2017.

The result missed a Refinitiv SmartEstimate of 15.2 trillion won, which analysts attributed to items such as employee bonuses, marketing costs for its mobile business and ramp-up costs for new panels. display included in the quarter.

“It feels like a shock because it came out less than consensus, but I don’t think it’s as bad as it sounds. It looks like they reflected various costs in the fourth quarter,” Park said. Sung-soon, analyst at Cape Investment. & Titles.

“It is not known at this time if there have been any changes to the planned chip deliveries,” Park added.

Revenue likely rose 23% from the same period a year earlier to 76 trillion won, the company said in a brief preliminary earnings statement, in line with market expectations.

Samsung (KS:) is due to release detailed results on January 27.

Although memory chip prices fell during the quarter, increased demand from server customers boosted Samsung’s quarterly shipments of DRAM chips, widely used in data centers, and NAND flash memory chips, used for data storage in tech devices, analysts said. .

Samsung shares rose 1.3% in morning trading.

Shares of Samsung Electronics (OTC:) have soared around 11% since early November on anticipation of a smaller-than-expected decline in memory chip prices in the first half of this year and then a rebound, spurred by new data centers and the demand for videos, games, conferencing and other high-traffic services.

Samsung’s logic chip business, which includes contract manufacturing of chips in competition with Taiwan Semiconductor Manufacturing Co (TSMC), is also expected to post a jump in operating profit to over 1 trillion won in the quarter. December due to a larger number of shipments and higher prices, Hanwha Investment & Securities analyst Lee Soon-hak said.

Estimated smartphone shipments by Samsung’s mobile business were around 67 million, up from nearly 69.3 million in the prior quarter, Counterpoint Research said, helped by easing component shortages, though marketing costs have weighed.

The company was recently merged into a single Device Experience (DX) division with television and home appliances.

($1 = 1,204.0400 won)

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