Rising Chip Prices Fuel Samsung’s Best Quarterly Profit in 3 Years

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SEOUL—Samsung Electronics Co. Ltd. connected Friday flagged a 28 percent leap successful its third-quarter operating nett to the highest successful 3 years, driven by rising representation spot prices and show income for caller flagship smartphone launches.

The preliminary effect was up 26 percent from the 2nd quarter, though conscionable beneath forecasts, portion the marketplace absorption was further muted arsenic analysts pencilled successful a level oregon somewhat little effect this 4th connected an expected autumn successful representation spot prices.

The world’s largest representation spot and smartphone shaper estimated its July-September nett astatine 15.8 trillion won ($13.3 billion), beneath a Refinitiv SmartEstimate of 16.1 trillion won. It is the highest quarterly nett since the 3rd 4th of 2018.

“The mobile business’s operating borderline mightiness person been little than the marketplace expected,” said Park Sung-soon, expert astatine Cape Investment & Securities. “We volition person to spot selling costs and what the premix of products Samsung sold was like.”

Rising representation spot prices and shipments, positive a leap successful profitability astatine Samsung’s spot declaration manufacturing business, apt raised the spot division’s operating nett by astir 79 percent from a twelvemonth earlier, analysts said.

Semiconductors accounted for astir fractional of Samsung’s operating nett successful the archetypal fractional of the year.

Samsung shares pared aboriginal gains to beryllium up 0.4 percent successful day trade. It is owed to denote elaborate net aboriginal this month.

The banal has fallen astir 12 percent truthful acold this twelvemonth versus a 3 percent emergence successful the wider market, wounded by losses successful September erstwhile U.S. adjacent Micron Technology Inc. said its representation spot shipments would gaffe successful the adjacent term.

Analysts said prices for representation chips are expected to tumble this 4th arsenic request for idiosyncratic computers drops amid an expected easing successful planetary lockdowns that person helped powerfulness sales, portion smartphone shipments whitethorn besides decline.

A agleam spot adjacent twelvemonth is expected to beryllium Samsung’s spot declaration manufacturing business, which connected Thursday announced plans to commencement producing cutting-edge, 3-nanometer spot designs successful the archetypal fractional of 2022, arsenic it races against manufacture person Taiwan Semiconductor Manufacturing Co. Ltd. to preempt precocious exertion and triumph clients.

For Samsung’s mobile business, estimated income of 2 cardinal caller foldable smartphones wrong a period showed request for its foldable handsets, that captured much of the wide marketplace than past year, analysts said.

However, this was apt offset by selling costs and higher constituent costs owed to the planetary spot shortage.

Samsung’s show portion apt saw coagulated results arsenic cardinal lawsuit Apple Inc. ramped up orders earlier its late-September motorboat of the iPhone 13 series, analysts said.

Overall gross apt roseate astir 9 percent from the aforesaid play a twelvemonth earlier to a grounds 73 trillion won, Samsung said successful a filing.

By Joyce Lee and Heekyong Yang

Reuters

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