2024-04-06 21:47:26
Samsung Electronics estimated on Friday that its first-quarter operating profit would rise more than 10-fold, beating market expectations, as chip prices began to recover from a sharp decline thanks to the boom in artificial intelligence.
But the expectations were not enough to motivate investors, who caused Samsung shares to fall 1.3 percent early on Friday, in line with a 1.1 percent decline in the broader market in South Korea, as they awaited updates on progress in its high-end memory chip business. Performance, which was lagging behind competitors, according to Reuters.
The world’s largest maker of memory chips and televisions estimated that its operating profit rose to a better-than-expected 6.6 trillion won ($4.89 billion) in the quarter ending March 31, surpassing LSEG Smart Investments’ estimate of 5.7 trillion won. .
This represents an increase of 931 percent from 640 billion won in the previous year, and will be Samsung’s highest operating profit since the third quarter of 2022.
But revenues fell short of expectations, likely rising 11 percent from the same period a year earlier to 71 trillion won, lower than LSEG Smart Investments’ estimate of 72.3 trillion won.
High price of chips
The better performance comes as its chip division, traditionally its biggest earner, is expected to report its first quarterly profit in five quarters as memory chip prices rise again from a sharp decline that began in mid-2022 due to weak demand for gadgets after the pandemic.
The prices of “DRAM” chips increased by about 20 percent during the first quarter compared to the previous quarter, while the prices of “NAND Flash” chips increased by 23 percent to 28 percent, according to data provider “Trend Force.”
Positive expectations for demand for memory chips, including an explosive appetite for chips such as High-Bandwidth Memory (HBM) used in artificial intelligence chips, have pushed Samsung shares to rise 34 percent over the past 12 months, exceeding… 10 percent gain in the broader market.
Last updated: April 5, 2024 – 23:11
Suggest a correction
2024-04-06 21:47:26