The Resurgence of Samsung Electronics: A Look at the First Quarter 2024

The Resurgence of Samsung Electronics: A Look at the First Quarter 2024

Samsung Electronics has made a bold prediction regarding its first quarter operating profit, expecting a staggering 931% increase. The preliminary statement indicates that the operating profit for the January-March quarter is likely to reach 6.6 trillion Korean won, a massive surge from the previous year’s 0.64 trillion won. This forecast has exceeded the estimated 5.24 trillion won by LSEG, showcasing the company’s confidence in its financial performance.

According to SK Kim, an executive director and analyst at Daiwa Securities, the solid earnings projected for the first quarter of 2024 are attributed to memory price hikes and robust S24 sales. The market estimates are expected to be surpassed, indicating that Samsung Electronics is poised for a profitable quarter ahead. The anticipated strong AI-driven memory upturn cycle is also predicted to contribute significantly to the company’s earnings in the coming years.

First quarter revenue for Samsung Electronics is expected to show an 11.4% increase from the same period last year, reaching a total of 71 trillion won. This growth in revenue demonstrates the company’s ability to bounce back from the challenges it faced in the previous year. LSEG analysts had predicted a slightly higher revenue of 71.8 trillion won, but Samsung’s performance remains impressive nonetheless.

Industry Trends

Samsung Electronics holds the title of being the world’s largest producer of dynamic random-access memory (DRAM) chips, which are essential components in consumer devices like smartphones and computers. The memory chip prices suffered a significant decline last year due to various factors such as excess inventories post-Covid and weak demand for end products. However, with production cuts and indications of improving demand, both Samsung and SK Hynix have seen a glimmer of hope in the memory chip market.

Despite macroeconomic uncertainties, the semiconductor industry seems to be on the path to recovery. The restocking demand in the smartphone and PC sectors has played a crucial role in revitalizing the industry. Counterpoint Research’s data indicates a sequential increase in revenue for the global foundry industry in the fourth quarter, signaling a positive trend. Samsung Electronics is expected to unveil detailed earnings later this month, providing further insights into its financial performance and future prospects.

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