Fact Checked by 
Samsung Electronics is expecting to record a whopping 931% increase in first-quarter operating profit thanks to a firm rebound in chip prices.
On Friday (5 Apr), the company released a preliminary statement detailing an almost tenfold increase in operating profit from the same period, last year. For January to March 2024, profits spiked to 6.6 trillion Korean won ($4.89 billion), a massive increase compared to 0.64 trillion won for Q1 in 2023.
Samsung is the world’s biggest manufacturer of various random-access memory (RAM) chips, which are commonly found in consumer devices such as smartphones and computers.
Company chiefs at the South Korean multinational will be delighted with the turnaround after its operating profit nosedived a year ago, as the downcycle of the semiconductor market began in earnest.
Samsung Electronics Announces Earnings Guidance for First Quarter 2024https://t.co/7HVnl6ld1I
— Samsung Electronics (@Samsung) April 5, 2024
Positive outlook ahead for Samsung
The positive update comes as the United States is set to award Samsung over $6 billion to expand the company’s presence in the country, with funding resulting from the 2022 Chips and Science Act. It already enjoys a sprawling operation in Austin, but a new strategic $17 billion plant is set to emerge in Taylor, also in the Lone Star State.
Samsung’s major rivals are Intel and Taiwan Semiconductor Manufacturing Co (TSMC), the world’s largest contract chipmaker. Both firms are also to benefit from US Government investment in a bid to make the bulk of their chips in the states.
That will not diminish the intense competition between the companies, after Intel emerged last month as the biggest earner from semiconductor manufacturing, ousting Samsung from the top spot.
Meanwhile, Japanese investment bank Daiwa Securities has forecast an encouraging outlook for Samsung, backing its turnaround to continue further into 2024.
Daiwa analyst and executive director SK Kim stated in a March 27 report, “We forecast Samsung Electronics will post solid earnings for Q1 24 driven by memory price hikes and robust S24 sales, beating market estimates.”
“We expect the strong AI-driven memory upturn cycle will drive earnings in 2024-25E,” added Kim.
Samsung Electronics is expected to provide a full breakdown of detailed earnings later this month.
Image credit: Omar Markhieh/Pexels
