Samsung Electronics estimates that operating profit in the first quarter of 2022 will jump 50 percent. The forecast will see Samsung's profit hit a record high since 2018, even beating expectations.
Samsung's profit increase was influenced by a surge in demand for making memory chips for smartphones. In addition, production disruptions experienced by Samsung's rival factory, namely the Japanese company Kioxia, due to contamination of raw materials, also served as a catalyst.
"Currently Kioxia is unable to meet the demand for chip manufacturing due to the disruption experienced, this has made NAND Flash as a distributor turn to Samsung to meet the demand for purchasing memory chip products in the market," said Park Sung-Soon, analyst at Cape Investment & Securities.
Thanks to the increase in demand for memory chips, Samsung's profit is projected to reach 14.1 trillion won or the equivalent of US $ 11.6 billion.
This projection surpasses its rival, Refinitiv Smart, which is estimated to only record 13.3 trillion won in revenue.
On the other hand, Samsung's revenue is predicted to continue to increase by 18% and can even compete with the previous year's performance, which recorded a record exceeding 77 trillion won.
"The increase may be influenced by the current demand for chips so that earnings can exceed expectations", continued Park.
As stated by Park, even though the price of memory chips is down, the number of requests that continue to rise will help the company's revenue.
In contrast to the increasing demand for chips, Samsung's smartphone shipments have declined. To date, Samsung has only shipped around 72 million smartphones in the first quarter.
This number is down about 11% from the previous year. The decline in the number of smartphone shipments was influenced by the late release of the latest series of Samsung smartphones.
One such example occurred in the Samsung Galaxy S21, whose sales did not live up to expectations. If the release process does not experience a setback, it will be like the launch of the Samsung Galaxy S22 which managed to sell 50% of its products in the first week of launch.
Samsung's total revenue amount will only be released on April 28, which is likely to attract investors' interest.
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