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Samsung Electronics is expecting to record a whopping 931% increase in first-quarter operating profit thanks to a firm rebound in chip prices.<\/p>\n
On Friday (5 Apr), the company released a preliminary statement detailing an almost tenfold increase in operating profit from the same period, last year. For January to March 2024, profits spiked to 6.6 trillion Korean won ($4.89 billion), a massive increase compared to 0.64 trillion won for Q1 in 2023.<\/p>\n
Samsung is the world\u2019s biggest manufacturer of various random-access memory (RAM) chips, which are commonly found in consumer devices such as smartphones and computers.<\/p>\n
Company chiefs at the South Korean multinational will be delighted with the turnaround after its operating profit nosedived a year ago, as the downcycle of the semiconductor market began in earnest.<\/p>\n
\nSamsung Electronics Announces Earnings Guidance for First Quarter 2024https:\/\/t.co\/7HVnl6ld1I<\/a><\/p>\n
\u2014 Samsung Electronics (@Samsung) April 5, 2024<\/a><\/p>\n<\/blockquote>\n
Positive outlook ahead for Samsung<\/h2>\n
The positive update comes as the United States is set to award Samsung over $6 billion<\/a> to expand the company\u2019s presence in the country, with funding resulting from the 2022 Chips and Science Act. It already enjoys a sprawling operation in Austin, but a new strategic $17 billion plant<\/a> is set to emerge in Taylor, also in the Lone Star State.<\/p>\n
Samsung\u2019s major rivals are Intel and Taiwan Semiconductor Manufacturing Co (TSMC), the world\u2019s largest contract chipmaker. Both firms are also to benefit from US Government investment in a bid to make the bulk of their chips in the states.<\/p>\n
That will not diminish the intense competition between the companies, after Intel emerged last month as the biggest earner from semiconductor manufacturing<\/a>, ousting Samsung from the top spot.<\/p>\n
Meanwhile, Japanese investment bank Daiwa Securities has forecast an encouraging outlook for Samsung, backing its turnaround to continue further into 2024.<\/p>\n
Daiwa analyst and executive director SK Kim stated in a March 27 report, \u201cWe forecast Samsung Electronics will post solid earnings for Q1 24 driven by memory price hikes and robust S24 sales, beating market estimates.\u201d<\/p>\n
\u201cWe expect the strong AI-driven memory upturn cycle will drive earnings in 2024-25E,\u201d added Kim.<\/p>\n
Samsung Electronics is expected to provide a full breakdown of detailed earnings later this month.<\/p>\n
Image credit: Omar Markhieh\/Pexels<\/a><\/em><\/p>\n<\/p><\/div>\n