Samsung expects first-quarter profit to soar 931% as memory chip prices rebound

Samsung
Electronics
on
Friday
said
it
expects
to
post
a
931%
increase
in
first
quarter
operating
profit,
as
chip
prices
rebound.

Operating
profit
in
the
January-March
quarter
likely
rose
to
6.6
trillion
Korean
won
($4.89
billion),
up
931%
from
a
year
ago,
according
to
a

preliminary
statement.
Profit
in
the
first
quarter
of
2023
was
0.64
trillion
won.

The
profit
guidance
for
the
first
quarter
of
2024
exceeds
LSEG’s
estimate
of
5.24
trillion
won.

“We
forecast
Samsung
Electronics
will
post
solid
earnings
for
1Q24
driven
by
memory
price
hikes
and
robust
S24
sales,
beating
market
estimates,”
said
SK
Kim,
executive
director
and
analyst
at Daiwa Securities
in
a
March
27
report.

“We
expect
the
strong
AI-driven
memory
upturn
cycle
will
drive
earnings
in
2024-25E,”
said
Kim.
Daiwa
maintained
their
“buy”
rating
on
Samsung
Electronics
and
lifted
price
target
to
110,000
won.

First
quarter
revenue
likely
rose
11.4%
from
the
same
period
a
year
ago
to
71
trillion
won,
the
firm
said
in
a
preliminary
earnings statement.
LSEG
analysts
expect
revenue
of
71.8
trillion
won.

Samsung
is
the
world’s
largest
maker
for
dynamic
random-access
memory
chips,
which
are
found
in
consumer
devices
such
as
smartphones
and
computers.

Memory
chip
prices
fell
drastically
last
year,
due
to
excess
inventories
post-Covid
and
weak
demand
for
end
products
like
smartphones
and
laptops.

In
third-quarter
earnings
calls,
both
Samsung
and
the
world’s
second-largest
DRAM
chip
maker
SK
Hynix
signaled
that

memory
chip
demand
weakness
had
finally
bottomed
out
following
production
cuts.

Revenue
from
the
global
foundry
industry
rose
about
10%
sequentially
in
the
fourth
quarter,
according
to

Counterpoint
Research’s
Foundry
Services.
However,
on
a
year-on-year
basis,
revenue
fell
3.5%
during
the
three-month
period.

“Despite
lingering
macroeconomic
uncertainties,
the
industry
started
bottoming
out
in
H2
2023,
driven
by
supply
chain
inventory
restocking
demand
in
the
smartphone
and
PC
sectors,”
said
Counterpoint
Research
on
April
2.

Samsung
Electronics
is
expected
to
announce
detailed
earnings
later
this
month.