Samsung says Q3 profit likely highest in 3 years on rising chip prices

October 8, 2021

By Joyce Lee and Heekyong Yang

SEOUL (Reuters) -Samsung Electronics Co Ltd said on Friday its third-quarter operating profit likely rose 28% to the highest in three years, helped by rising memory chip prices and display sales for smartphone makers’ new flagship launches.

The world’s largest memory chip and smartphone maker estimated July-September profit at 15.8 trillion won ($13.3 billion), slightly below a Refinitiv SmartEstimate of 16.1 trillion won. It is highest quarterly result since the third quarter of 2018.

Revenue likely rose about 9% from the same period a year earlier to a record 73 trillion won, Samsung said in a short preliminary earnings release. It is due to announce detailed earnings later this month.

Rising memory chip prices and shipments, plus a jump in profitability at Samsung’s chip contract manufacturing business, likely raised the chip division’s operating profit by about 79% from a year earlier, analysts said. Semiconductors accounted for about half of Samsung’s operating profit in the first half of the year.

Samsung shares rose 1% in morning trade.

The stock has fallen about 12% so far this year versus a 3% rise in the wider market, hurt by losses in September when U.S. peer Micron Technology Inc said https://ift.tt/3llIuY1 its memory chip shipments would slip in the near term. The decline reflects industry views that memory chip prices will tumble from the fourth quarter, analysts said.

Samsung’s chip contract manufacturing business on Thursday announced plans to start producing cutting-edge, 3-nanometre chip designs in the first half of 2022, as it races against industry leader Taiwan Semiconductor Manufacturing Co Ltd to preempt advanced technology and win clients.

For Samsung’s mobile business, estimated sales of 2 million https://ift.tt/3akweki new flagship smartphones within a month showed demand for its foldable handsets captured more of the mass market than last year, analysts said.

However, this was likely offset by higher component costs due to the global chip shortage, as well as marketing costs.

($1 = 1,191.2500 won)

(Reporting by Joyce Lee and Heekyong Yang; Editing by Christopher Cushing and Richard Pullin)

Source Link Samsung says Q3 profit likely highest in 3 years on rising chip prices