Technology

Samsung flags 26% profit boost on chip, display sales

Samsung flags 26% profit boost on chip, display sales

Seoul: Samsung Electronics Co Ltd said on Friday that fourth-quarter operating profit likely rose 26 per cent, in line with analysts’ estimates, as pandemic-driven remote working fuelled sales of chips and display panels.

The South Korean tech giant said operating profit was likely 9 trillion won (Dh30 billion) in the quarter ended December, offsetting weaker smartphone sales and a strong won versus the dollar. That was in line with the 9.1 trillion won analyst forecast by Refinitiv SmartEstimate.

Revenue at the world’s biggest memory chip supplier and maker of smartphones likely rose 1.9 per cent to 61 trillion won from a year earlier, the company said.

Samsung provides only estimates of quarterly revenue and operating profit in its preliminary earnings release. The company is due to release detailed earnings later this month.

Analysts said they expected Samsung to report a jump in memory chip shipments from the September quarter, offsetting the effect of lower prices.

Memory chip prices will likely rebound in the first half of this year, analysts said, as data centre customers return to buying chips, as well as demand from 5G smartphones, notebooks, graphics and automotive.

South Korea expects semiconductor exports to rise more than 10 per cent in 2021 as the coronavirus pandemic encourages companies to add bandwidth for remote work and consumers to spend more on devices.

Samsung likely recorded an estimated 17.5 per cent drop in smartphone shipments in October-December compared to the previous quarter, partly due to competition from Apple’s new iPhone 12, Counterpoint Research said.

A strong won against the U.S. dollar also dented profits.

Samsung makes the bulk of its profits in dollars but reports in won.