Samsung Electronics Co Ltd stated on Thursday it expects chip earnings to extend however cell earnings to drop within the present quarter, as a world chip scarcity impacts its companies in numerous methods.
Samsung, which reported a 46 p.c rise in first-quarter revenue, stated it anticipated reminiscence chip earnings to enhance ”considerably” within the second quarter, as ”market situations enhance on the again of robust server demand” in addition to strong demand by different purposes.
However, revenue and gross sales at its cell enterprise are more likely to drop within the second quarter versus the primary resulting from provide points for some elements and a fall in flagship smartphone gross sales, the world’s prime maker of reminiscence chips stated in an announcement.
Samsung stated its chip plant in Austin, Texas, has resumed full manufacturing after a winter storm shut down within the first quarter, however its System LSI Business, which designs logic chips similar to cell processors, will doubtless proceed to be affected by the manufacturing disruption this quarter.
The System LSI enterprise plans to broaden its use of outsourced foundries and strengthen cooperation with its in-house foundry to safe manufacturing capability, Samsung stated, noting the present international chip scarcity may persist within the second half.
”Samsung Electronics’ personal foundry is saturated with orders, it can’t deal with the demand quantity,” stated Park Sung-soon, an analyst at Cape Investment & Securities. ”So it’s rising the amount of outsourcing regardless of having an in-house foundry.”
Smaller cross-town rival SK Hynix stated on Wednesday it’ll convey ahead deliberate capital spending, however warned provide will increase from the funding will come solely subsequent yr, pointing to a protracted international semiconductor scarcity.
Samsung’s forecasts got here because it posted a 9.Four trillion gained ($8.48 billion) working revenue within the January-March quarter, its highest first-quarter working revenue since 2018.
The outcome, which was barely forward of the corporate’s estimate earlier this month, was pushed by a 66 p.c revenue surge at its cell enterprise to 4.Four trillion gained.
The soar was led by gross sales of its flagship Galaxy S21 smartphone collection, whereas revenue additionally soared at its tv set and residential equipment enterprise, buoyed by continued stay-at-home demand.
Profits at its chip enterprise, nonetheless, fell resulting from the price of ramping up home manufacturing in addition to losses on the Texas plant following the storm-related stoppage in mid-February that blunted the advantages of robust demand.
First-quarter web revenue rose 46 p.c to 7.1 trillion gained. Revenue climbed 18 p.c to 65.Four trillion gained. Samsung’s shares fell 0.Four p.c in early commerce on Thursday, according to 0.three p.c fall within the wider market.
