Highest Q1 profit since 2018 expected by Samsung Electronics due to quick profits on memory chips
Solid demand for memory chips is keeping prices stronger than anticipated. This will likely result in Samsung Electronics’ Q1 2022 operating profits to hit record levels since 2018. The world's biggest smartphone and memory chip manufacturer is likely to get almost USD 11 billion according to a weighted estimate from 13 analysts. This number is 41% more than in Q1 2021.
Preliminary results will be announced by the South Korean giant on Thursday.
The profits from the company’s proprietary Q1 chip will probably double the 2021 results of USD 6.2 trillion, more than double the previous year's USD 2.76 trillion.
Chip production accounts for about 50% of the tech giant's profits.
According to analysts, the prices for the coveted chips held up above expectations in Q1 2022, even though customers bought up extra stock in order to hedge against supply chain bottlenecks. The boost in this sector of the economy is rooted in the powerful demand and guarded investment spending.
The company’s mobile business profit is estimated at USD 3.3 trillion, slightly down from USD 3.6 trillion in 2021, but is above the level of its mobile profits in the same period in 2017-2020.
Samsung’s flagship Galaxy S22 was released in February, selling approximately 8 million units in Q1 according to analysts.
Samsung has the biggest chunk of Russia's smartphone market with approximately 30%, but a sanction-induced halt in shipments to Russia would hardly have a major effect on the company since Russia and Ukraine combined comprise a mere 2% of Samsung's total revenue.
In March Samsung stated that Russia-bound shipments were halted following the invasion of Ukraine, but services such as Samsung Pay are said to still be functioning in Russia according to social media posts. Samsung shares dropped ~12% percent year-to-date, over concerns about the consequences of the Ukraine crisis on international demand for tech devices and worries about falling production numbers at its top-notch plant.Source