Samsung sees an increase in chip earnings
Samsung sees an increase in chip earnings

Samsung said Thursday that due to the global shortage of semiconductors, customers want to have the number of chips they need. As a result, Samsung expects to increase chip earnings in the second quarter, which is expected to affect the production of chips and devices for mobile devices in the same quarter.

Samsung's first quarter of three years recorded its highest operating profit in three years. Given the strong demand for servers and improvement in market conditions, the company expects a major improvement in memory chips in the second trimester of pregnancy.

The company said that due to the supply of certain components and a large drop in smartphone sales after the strong performance in the first quarter, the profits and sales of the wireless business could decline.

The world's largest manufacturer of memory chips has announced that some products and displays will be discontinued due to a global shortage of semiconductors.

The company is looking to increase production, and this growth should be distributed to customers who need advanced chipsets such as Qualcomm and Nvidia, as well as Samsung mobile processors.

Samsung said its chip plant in Austin, Texas, resumed full production after the winter storm in the first quarter, resulting in a loss of 300 to 400 billion won.

The company's LSI business system developed logic chips such as mobile processors and continued to be affected by outages this quarter.

Samsung plans to expand the use of external factories and work with factories to ensure production capacity. This indicates that the global chip shortage may continue into the second half of the year.

Apple warned on Wednesday that a chip shortage could cut sales by $ 4 billion in the third quarter of this fiscal year.

“The price of DRAM chips, which are widely used in notebook computers and other computing devices, is expected to continue to rise in the second half of the year,” Samsung said.

For NAND chips serving the data storage market, demand for some applications is expected to exceed supply.

The continuing trend and expansion of 5G devices and servers mean that they contain more chips and process more data. Compared to the first quarter, the price of DRAM chips is expected to increase by 18% this quarter.

Samsung expects its first-quarter operating profit to increase 46% year-on-year to 9.4 trillion won ($ 8.48 billion) in the first quarter. This is the highest operating profit in the first quarter since 2018.

Cell business profits rose 66% year-on-year to 4.4 trillion won. This is the highest profit in the first quarter since 2014, mainly due to the sale of the main series of smartphones, the Galaxy S21.

First-quarter net income increased 46% to 7.1 trillion won and sales increased 18% to 65.4 trillion won.

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