Rising Chip Prices Boosts Samsung’s Quarterly Profit in 3 years

Samsung Electronics estimated that its earnings for the third quarter of 2021 have reached their highest in three years, with the boost largely coming from high semiconductor prices due to a global shortage.

The world’s biggest maker of memory chips and smartphones registered a 28 percent jump in its approximated operating profits during the third quarter, while revenue jumped by nearly 15 percent from the previous quarter.

Samsung’s operating profits were at around 73 trillion KRW ($61 billion) and revenue was approximately 15.8 trillion KRW ($13.2 billion) — slightly lower than the 16.1 trillion KRW ($13.5 billion) anticipated by Refinitiv surveys.

The earnings are the semiconductor giant’s best since the third quarter of 2018 that posted sales of 17.57 trillion KRW ($14.7 billion).

The surging demand for electronics due to the COVID-19 pandemic boosted Samsung’s sales, along with a global shortage of semiconductor chips.

But analysts warn that as work-from-home setups are reduced with the reopening of economies, electronics manufacturing could be entering a downcycle.

“Rising inflation will also drive up their production costs, which will subsequently damp demand,” added Kim Young-woo, an analyst at SK Securities.

Concerns over a downcycle in the electronics sector have driven Samsung’s shares down by more than 20 percent since the January peak. Its shares closed on Oct. 8 with this year’s lowest at 71,500.


© Fourth Estate® — All Rights Reserved.
This material may not be published, broadcast, rewritten or redistributed.