Tech giant Samsung Electronics has said it expects to post a 52% rise in profit during the first three months of 2022, amid global shortages of chips and semiconductors. The world’s largest memory chipmaker estimates that it earned 13.8 trillion won (about 11.5 billion euros) in the last third of 2021.
Samsung hopes to come close to those figures in what would be its biggest single-quarter operating profit in the past four years. The company’s total profits are also being boosted by strong demand for server memory chips , fueled by cryptocurrency mining, and higher profit margins in its contract chip manufacturing business.
To bad weather, good face
Samsung is well positioned to benefit from record demand for PCs and consumer electronics. In addition, the company has been benefiting from fluctuations in the South Korean currency , as the won continues to depreciate, making exports from South Korea much more attractive in the global market.
However, the estimated profit for the second quarter of 2021 was lower than the 15.2 trillion won expected by many analysts. Samsung’s spending on assets such as employee bonuses and marketing for its smartphone business was one reason it missed the market forecast.
Serious global supply crisis
In recent months, the global shortage of semiconductors has caused great problems for manufacturers of electronic devices throughout the world, even some manufacturers of cars or appliances that integrate these components have had to suspend production. Even the technology giant Apple has already warned that iPhone shipments could suffer significant delays throughout 2022.
Investors around the world are also keeping a close eye on the company’s chip-making operation in Xi’an, central China. In any case, the city has been closed since last December 23 due to an outbreak of coronavirus and at the moment it is not known when production will be able to resume.
Samsung said last week that it would “temporarily adjust operations” at its factories in the city of Xi’an, but did not elaborate on whether such measures would positively or negatively affect microchip production . Last November, Samsung announced that it had chosen a site near the US city of Taylor, in the state of Texas, for its new laptop chip plant, in which it invested more than 17,000 million dollars. The plant is expected to be operational in the second half of 2024. It is the largest US investment by the South Korean electronics giant.
