Seoul: Samsung Electronics Co., Ltd. said on Wednesday that its profit in the first quarter may increase by 44%. Analysts attribute this increase to strong sales of smartphones and TVs, despite the possible decline in chip revenues due to the turmoil in the United States. , This growth has moderated.
The South Korean technology giant forecast January-March operating profit of 9.3 trillion won ($8.32 billion), matching a weighted average analyst forecast from Refinitiv SmartEstimate.
Analysts said Samsung’s mobile division likely saw operating profit soar more than 1 trillion won to about 4.15 trillion won after its flagship Galaxy S21 smartphone series outsold the previous version by a two-to-one margin in the six weeks since its January launch, according to research provider Counterpoint.
A lower starting price for the flagship helped sales for the world’s largest smartphone maker during the quarter, with the S21 priced $200 lower than the S20, Counterpoint said.
Profit in Samsung’s television set and home appliance business also likely more than doubled to around 1 trillion won, analysts said, due to continued stay-at-home demand.
LG Electronics, a cross-city TV and home appliance competitor, announced on Wednesday that it had the largest preliminary quarterly operating profit ever of 1.5 trillion won from January to March.
In Samsung’s chip division, analysts said profits may fall by 20% to 3.6 trillion won. This is due to increased domestic production costs and losses at the Texas plant after the shutdown in mid-February, which undercut the benefits of strong demand.
US memory chip company Micron Technology Inc. (Micron Technology Inc.) last month predicted that due to increased demand from the global shift to remote work, third-quarter revenue was higher than analysts expected.
The price of DRAM chips widely used in laptops and other computing devices rose 5.3% in January-March from the previous three months, showed data from TrendForce. Analysts expect that trend to continue as a global chip shortage spurs on buyers to snap up supplies.
“Prices are likely to rise further in the current quarter due to solid demand for servers,” said analyst Park Sung-soon at Cape Investment & Securities.