Status: 07.01.2022 12:37 p.m.
The high demand for memory chips has probably brought Samsung Electronics strong growth. For the electronics company, it should be the best result in years.
The South Korean telecommunications group Samsung Electronics has made a profit jump thanks to the high demand for memory chips. As the company announced, citing preliminary figures, the highest operating profit was achieved in four years.
In the fourth quarter, the operating result climbed by 52 percent to the equivalent of around 10.16 billion euros. At the same time, sales increased by 23.5 percent to around 55.8 billion euros – a record. The world market leader in memory chips, smartphones and televisions plans to publish specific quarterly figures on January 27th.
Profit estimate below expectations
The result, however, was lower than expected by analysts, which they attributed to employee bonuses, high marketing costs in the smartphone business and expenses for the introduction of new displays. “I think it’s not as bad as it looks. The quarter reflects different costs,” said Cape Investment analyst Park Sung Soon.
The estimates for the fourth quarter also include a one-time special bonus for all employees, it said. Samsung Electronics claims that it employs almost 268,000 people worldwide.
World’s largest chip provider
The chip division contributes around two thirds to the profits of the South Korean group. The semiconductor business in particular has recently increased significantly due to the strong demand for data centers. According to market observers, Samsung also benefited from the fact that the decline in average sales prices for DRAM memory chips and NAND flash memory was less than expected. Flash chips are mainly used in mass storage devices such as USB sticks and camera memory cards.
Samsung is not only the world’s largest memory chip provider, but also a smartphone leader ahead of rivals like Apple and Xiaomi. The analysts at Counterpoint Research assume that Samsung shipped around 67 million smartphones from October to December, almost matching the result from the previous quarter. Only recently, the South Koreans announced that they would merge the mobile phone business with the television and household appliance division.
The jump in profit was also well received by investors. The Samsung shares gained nearly two percent. The papers from the German semiconductor manufacturer Infineon were also fueled by it. The stocks gained 1.3 percent at times, making them one of the strongest DAX stocks.