Samsung Electronics is anticipating to document a whopping 931% improve in first-quarter operating profit due to a agency rebound in chip prices.
On Friday (5 Apr), the corporate launched a preliminary assertion detailing an virtually tenfold improve in operating profit from the identical interval, final 12 months. For January to March 2024, earnings spiked to six.6 trillion Korean gained ($4.89 billion), a large improve in comparison with 0.64 trillion gained for Q1 in 2023.
Samsung is the world’s largest producer of varied random-access reminiscence (RAM) chips, that are generally present in client gadgets similar to smartphones and computer systems.
Company chiefs on the South Korean multinational shall be delighted with the turnaround after its operating profit nosedived a 12 months in the past, because the downcycle of the semiconductor market started in earnest.
Samsung Electronics Announces Earnings Guidance for First Quarter 2024https://t.co/7HVnl6ld1I
— Samsung Electronics (@Samsung) April 5, 2024
Positive outlook forward for Samsung
The constructive replace comes because the United States is about to award Samsung over $6 billion to increase the corporate’s presence within the nation, with funding ensuing from the 2022 Chips and Science Act. It already enjoys a sprawling operation in Austin, however a brand new strategic $17 billion plant is about to emerge in Taylor, additionally within the Lone Star State.
Samsung’s main rivals are Intel and Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker. Both companies are additionally to profit from US Government funding in a bid to make the majority of their chips within the states.
That is not going to diminish the extraordinary competitors between the businesses, after Intel emerged final month as the most important earner from semiconductor manufacturing, ousting Samsung from the highest spot.
Meanwhile, Japanese funding financial institution Daiwa Securities has forecast an encouraging outlook for Samsung, backing its turnaround to proceed additional into 2024.
Daiwa analyst and govt director SK Kim acknowledged in a March 27 report, “We forecast Samsung Electronics will post solid earnings for Q1 24 driven by memory price hikes and robust S24 sales, beating market estimates.”
“We expect the strong AI-driven memory upturn cycle will drive earnings in 2024-25E,” added Kim.
Samsung Electronics is anticipated to offer a full breakdown of detailed earnings later this month.
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