Samsung sees profit to increase by 52%

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Amid the international chip shortage, a 52 percent increase in profit is expected by technology behemoth Samsung Electronics for the last three months last year, BBC reported.

During the period, Samsung, being the largest chipmaker in the world, said it approximately generated 13.8tn won.

The figure is set to top the company’s operating profit for the fourth quarter in four years.

The robust demand for server memory chips as well as the higher profit margins in Samsung’s chip contract manufacturing business contribute to the boost of its profit.

“Samsung is well placed to profit from the record-breaking demand for PCs and electronics,” technology analyst Sam Reynolds told BBC.

“The Korean won continues to depreciate, making Korea’s exports more attractive on the global market,” he said, stressing how the company took the currency fluctuations to their benefit.

The company’s estimated profit, however, is less than what several analysts predicted at 15.2tn won.

Among the reasons seen to result in Samsung missing the market forecast are its spending on employees’ incentives as well as its smartphone business marketing.

Semiconductor shortage has led to main disruptions for manufacturers in recent months. It affected the production of carmakers and shipments of Apple.

Moreover, investors are on the lookout for Samsung’s chip manufacturing operation in Xi’an, central China which has been placed under virus-related lockdown since December 23.

Last week, Samsung said that it would “temporarily adjust operations” at its Xi’an sites without delving deeper into the details.

The company in November announced its chosen site in the US, specifically in the US city of Taylor in Texas, to house its new $17bn computer chip plant.

The site marks the largest investment of the company in the US and it is expected to be in operation in 2024.

On Friday, the South Korea-based company was trading around 1.8 percent higher in Seoul.