Connect with us

World

Samsung Electronics tips record Q1 profit as chip boom winds down

Published

on

Samsung Electronics Co Ltd tipped a surprise record first-quarter profit on Friday but market reaction was muted due to growing concerns that the semiconductor boom that has driven the South Korean tech giant’s earnings is about to end.

Samsung shares fell after the announcement as analysts forecast similar or lower profit in the second quarter, due to slower growth in DRAM chip prices and higher marketing costs for the flagship Galaxy S9 smartphone.

“Even if profits start falling in the second half, Samsung will have a strong balance sheet this year,” said Song Myung-sup, analyst at HI Investment & Securities, predicting looser supply of DRAM chips to start driving down prices.

The global semiconductor leader and Apple Inc smartphone rival forecast January-March profit to leap 57.6 percent from a year earlier to 15.6 trillion won ($14.7 billion), beating an average forecast of 14.5 trillion won from a Thomson Reuters survey of 21 analysts.

Revenue for the quarter was tipped to rise 18.7 percent to 60 trillion won, Samsung said in a regulatory filing. The company did not elaborate on its performance and will disclose detailed earnings in late April.

Samsung shares fell as much as 2.7 percent on Friday before paring losses to fall 0.7 percent as of 0345 GMT (11.45 p.m. ET), compared to a 0.4 percent drop in the wider market.

Analysts said Samsung’s shares were affected by a UBS report forecasting an increase in the supply of DRAM chips used in servers, which dragged down Micron Technology Inc shares more than 6 percent on Thursday.

The prices of NAND chips commonly used in mobile devices began falling late last year and analysts have been closely watching for signs of the peak in the DRAM price boom as well.

Even if DRAM price growth is at its peak, analysts said Samsung remained on track for record annual earnings.

“Although gains in memory chip prices have slowed from the height of the chip boom, lower prices could also increase demand for chips, and Samsung has the cost-cutting ability to keep profits up,” said Greg Roh, analyst at HMC Investment & Securities.

Source link

World

‘Pandemic fatigue’ leads to resurgence of coronavirus in Europe

Published

on

Continue Reading

World

Coronavirus live updates: Israel locks down again ahead of High Holidays; EU strikes vaccine deal with Sanofi, GSK

Published

on


The coronavirus has infected more than 30.2 million people globally as of Friday, killing at least 946,685 people so far.

Source link

Continue Reading

World

Economy is showing positive signs, but banks will feel the brunt

Published

on

Continue Reading

Trending