Samsung reports record sales in Q3 as chip prices rise

Home > Business > Tech

print dictionary print

Samsung reports record sales in Q3 as chip prices rise

People browse Samsung Electronics' Galaxy Z Flip 3 and Z Fold 3 at the company's experience store in Singapore. [SAMSUNG ELECTRONICS]

People browse Samsung Electronics' Galaxy Z Flip 3 and Z Fold 3 at the company's experience store in Singapore. [SAMSUNG ELECTRONICS]

 
Samsung Electronics expects to report an all-time high of 73 trillion won ($61.2 billion) in sales for the third quarter thanks to the robust performance of its smartphone and semiconductor businesses.

 
The figure, which is up 9.62 percent on year and 14.65 percent on quarter, was released in an earnings guidance announcement Friday. It is close to FnGuide's market consensus of 73.9 trillion won and beats the company's previous record of 66.96 trillion won in the third quarter last year.
 
Operating profit is projected to register 15.8 trillion won during the same period, the second largest ever.
 
The latest profit is 27.94 percent higher than the same period last year and 25.7 percent higher than the previous quarter, on par with the market consensus.
 
Neither net profit nor segmentation were provided.
 
Analysts pointed to the surging prices of semiconductor products as a driving force for the record-high sales, predicting that the semiconductor business has brought in around 9 trillion won in operating profit.
 
The prices of dynamic random access memory (DRAM) chips reached its peak in the third quarter, according to Taiwan-based market tracker TrendForce, with the prices of server and mobile DRAMs rising in the 5 to 15 percent range.
 
Scottsdale, Arizona-based research firm IC Insights projected a 10 percent growth in sales of semiconductor products for Samsung as demand for electronic gadgets and data servers push manufacturers to pile up chips.
 
“Also, the big three memory IC suppliers — Samsung, SK Hynix and Micron — are each expected to post a 10 percent increase [in the third quarter],” said a report released by IC Insights.
 
It cited strong demand for memory in data center servers, enterprise computing and for 5G smartphones and related infrastructure as the main factors.
 
Revenue from the contract chipmaking business or foundry also likely displayed steep growth in sales since different manufacturers in automobile and electronics devices ramp up production amid a prolonged global shortage of chips.
 
Against this backdrop, Samsung is moving to increase the prices of contract chip fabrication by up to 20 percent, which could further boost foundry sales in the coming months.
 
The smartphone business is believed to contribute to bumping up sales with the latest Galaxy Z foldable models taking off.
 
Song Myung-seob, an analyst at Hi Investment & Securities, estimated that the smartphone and network equipment division could generate 3.7 trillion won in operating profit, up 15 percent compared to the previous quarter.
 
“Despite the surging cost of parts and marketing expenditures, the shipment of smartphones increased to 69 million units thanks to the release of new foldable models,” Song said.
 
The analyst forecast that the consumer electronics division brought in 1.4 trillion won in profit, up 17 percent from the previous quarter, while the display business recorded 1.5 trillion won, up 15 percent on quarter.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now