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The growth in sales of Samsung phones outweighs the success of chip production

The growth in sales of Samsung phones outweighs the success of chip production

Samsung Electronics has forecast a nearly 45 percent jump in earnings in the first quarter on major sales of smartphones and home appliances, helping offset the success of the Texas storms in its chip production.

Year-on-year operating profit rose 44.2 percent year-on-year to $ 9.3 billion ($ 8.3 billion), the South Korean technology group estimated on Wednesday. This would mark the biggest increase since the first quarter of 2018, in line with the projections of analysts surveyed by Refinitiv. Samsung forecast sales to Won65tn to rise 17.5% year-on-year.

Analysts believe that the profits of the world’s largest manufacturer of memory chips, smartphones and electronic screens should improve in the coming quarters. The global semiconductor supply demand for electronic devices has risen sharply during the coronavirus pandemic and shortages caused by US production shutdowns and Japan.

Analysts highlighted the performance of the Samsung mobile division in the first quarter after the group launched a regular phone and mid-priced models in January, about a month earlier than usual. Sales of high-quality TVs and other high-margin consumer electronics also jumped when home consumers splashed on appliances.

Strong gains have also been highlighted complete recovery For Samsung since the economic downturn of the pandemic, even operating profits in 2018 have reached half the peak of the semiconductor cycle.

Samsung is estimated to have achieved about 23 percent of global phone sales in January and March. That’s up from 16 percent in the previous quarter US rival Apple According to Counterpoint Research, its new iPhone was launched.

Kim Young-woo, an analyst at SK Securities, estimates that operating profits in Samsung’s mobile division rose 66 percent as a Won4.4tn group he continued to benefit Huawei for U.S. sanctions against Chinese competitor.

On Monday, Seoul’s LG Electronics rival announced it would do so close the loss of its phone losses after it struggled to compete against Samsung, Apple and low-cost Chinese friends.

“Samsung’s results in the mobile and home appliance divisions were very strong thanks to early versions of the phones and lower production costs,” Kim said. “The foundry business suffered losses at the Austin plant due to a power outage. But chip prices began to rise in March and will rise further in the second quarter.”

A a huge snowstorm in Texas which caused power outages in February which forced Samsung’s Austin chip plant offline for more than a month. Analysts have estimated that the interrupted production losses were Won300bn-Won400bn. The company said plant operations have returned to near normalcy by the end of March.

Last month, Samsung sounded the alarm. “severe imbalance“The shortage of chips that has disturbed automakers in the semiconductor industry has threatened to spill over into the wider technology sector.

Separately, LG posted quarterly results on Wednesday after strong sales of home appliances. Operating profit rose nearly 40 percent year-on-year to 1.5 million euros, while sales rose 28 percent to 18.8 million a year, according to the company’s first estimates.

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