Samsung Electronics is expected to post a near nine-fold increase in first-quarter profit from a year earlier as rebounding semiconductor prices lift earnings from a low base caused by a severe chip downturn.
Operating profit for the world's biggest maker of memory chips and TVs likely rose to 5.7 trillion won (S$5.71 billion) in the quarter ended March 31, according to the average of an LSEG SmartEstimate from 27 analysts, weighted toward those who are more consistently accurate.
If so, it would be Samsung's highest profit since the third quarter of 2022. It compares with an operating profit of 640 billion won in the first quarter last year.
This is because its chip division, traditionally its biggest earner, is expected to report its first quarterly profit in five quarters of about 750 billion won, according to an average estimate from 12 analysts.
Memory chip prices have rebounded from a deep trough that began mid-2022 due to weak post-pandemic demand for gadgets that use the chips.
During the first quarter, memory chip prices jumped by about 20 percent versus the previous quarter for DRAM chips used in tech devices and 23 percent to 28 percent for NAND Flash chips used for data storage, according to data provider TrendForce.
The bullish outlook for memory chip demand, including exploding appetite for chips such as high-bandwidth memory (HBM) used in artificial intelligence chipsets, has driven a 29 percent rise in Samsung shares over the last 12 months.
Samsung's chip design and chip contract manufacturing businesses are still loss-making, analysts said. But memory chipmakers have limited supply of lower-margin chips since the downturn, while buyers are restocking inventory, improving the tech giant's profits.
