Samsung Electronics estimates fourth-quarter profit up 52.5% from record sales

The world’s largest smartphone maker forecast operating profit for the fourth quarter of 2021 at around 13.8 trillion won ($11.5 billion), up from 9.05 trillion won in the same quarter last year.

The firm was boosted by record sales in the quarter, an estimated 76 trillion won, up 23.5 percent year-on-year, according to the statement, which said the forecast reflects one-time bonus payments to employees.

a spokesperson told AFP Annual sales in 2021 were also expected to be the highest ever. Operating profit was lower than analysts’ estimates of 15.2 trillion won, according to Bloomberg News.

“Continued price increases in memory chips, which lasted three consecutive quarters until October last year, have boosted Samsung’s profit margins,” said Park Sung-soon, an analyst at Cape Investment & Securities.

“The most important source of income for Samsung lies in the memory chip business.”

Samsung Electronics on Friday did not divulge details about the performance of its various divisions. The firm is expected to release its full results on January 27.

While the coronavirus pandemic has wreaked havoc on the world economy, it has helped many tech companies accelerate.

The work-from-home pandemic has stoked demand for appliances powered by Samsung’s chips, as well as home appliances such as TVs and washing machines. Analysts also expected the firm to benefit from a traditionally attractive holiday season.

The world’s largest memory chip maker, Samsung Electronics, has aggressively increased investments in its semiconductor business as the world grapples with chip shortages that have affected everything from cars and home appliances to smartphones and gaming consoles.

In November, it announced a new microchip factory in Texas, with an investment of $17 billion. The plant is expected to be commissioned by the end of 2024. It joins TSMC’s rivals from Taiwan and American firm Intel in expanding chip manufacturing capacity in the United States, which sees the region as an area of ​​strategic competition with China.

The firm is also investing in the development of advanced technologies such as artificial intelligence, robotics and 5G/6G communications. Samsung Electronics is a major subsidiary of the giant Samsung Group, by far the largest of the family-controlled empires known as Chaebol, which dominated business in South Korea.

The group’s total turnover accounts for about a fifth of South Korea’s GDP. Shares of Samsung Electronics were up 1.4 per cent during morning trading in Seoul.

This story has been published without modification in text from a wire agency feed. Only the title has been changed.