Samsung Elec sees component shortages persisting in H2, solid server chip demand – Reuters.com

SEOUL, April 28 (Reuters) – Samsung Electronics Co Ltd (005930.KS) said on Thursday it expects firm data centre demand for high-margin memory chips to continue in the second half, but warned component shortages will likely persist as well.
The world's top memory chip and smartphone maker said underlying server chip demand appears "relatively solid" as companies boost investments and look to new technologies to increase their business.
"Companies are now expanding IT infrastructure, and cloud companies are expanding investments to explore new growth areas like artificial intelligence and machine learning," said Han Jin-man, executive vice president of Samsung's memory chip business during an earnings call.
"However, there are still some parts supply issues, which could lead to disruptions. We're going to monitor demand fluctuations very closely and intend to provide supply that fits the demand," he said.
Samsung forecast weaker demand for mobile phone and personal computer chips in Q2 as consumers weather issues such as rising inflation and COVID-19 lockdowns, but corporate PC demand is expected to remain solid, while more 5G-capable phone rollouts in the second half could lift mobile demand.
Memory chip rival SK Hynix (000660.KS) offered a similar outlook on Wednesday. read more
Analysts said Samsung's recent focus on selling more high-margin memory products to prioritise profitability over volume would ultimately limit shipments and help boost DRAM prices later in the year, as would the limited increases in chip production capacity due to delivery delays in chipmaking gear.
In the chip contract manufacturing business which counts Qualcomm (QCOM.O) and Nvidia (NVDA.O) as clients, Samsung said its order book for the next five years was eight times its 2021 revenue.
It plans to win more top-tier customers for chip manufacturing in fields outside mobile phones, such as high performance computing, network equipment and the automotive industry.
The logo of Samsung Electronics is seen at its office building in Seoul, South Korea, March 23, 2018. REUTERS/Kim Hong-Ji
Samsung forecast continued growth in the smartphone market in the second half despite component shortages, and expected the foldable phone market to double in size from the previous year.
The South Korean giant confirmed a 51% rise in operating profit to 14.1 trillion won ($11.1 billion) for the quarter ended March 31, in line with its previous forecast. It was the company's highest first-quarter profit since 2018.
Still, Samsung shares traded down 0.6% on Thursday, compared with a 0.7% rise in the wider market (.KS11), extending a year-to-date fall of 17%.
"Samsung's stock price is a market issue, rather than an issue arising from the company," said Park Sung-soon, analyst at Cape Investment & Securities.
"In the past, when the memory chip industry was very cyclical, there was high visibility in demand, so investment was attractively predictable. But now there are all these macro issues and low demand visibility."
Profits at its chip business rose to 8.45 trillion won, more than double the 3.36 trillion won a year earlier, fueled by record sales of server chips in the quarter.
Profits at the mobile and network business came in at 3.8 trillion won in the first quarter, down 13% from a year ago. Sales were supported by ramped-up production of the mid-to-low-end Galaxy A series and the launch of Samsung's flagship Galaxy S22 series, said Canalys analyst Sanyam Chaurasia.
Overall revenue rose 19% to a record 77.8 trillion won.
($1 = 1,271.3900 won)
Our Standards: The Thomson Reuters Trust Principles.
Sign up to our tech newsletter to get the latest news and trends in the global technology industry.
Subscribe to our newsletter to get all the news you need to start your day.
Reuters, the news and media division of Thomson Reuters, is the world’s largest multimedia news provider, reaching billions of people worldwide every day. Reuters provides business, financial, national and international news to professionals via desktop terminals, the world's media organizations, industry events and directly to consumers.
Build the strongest argument relying on authoritative content, attorney-editor expertise, and industry defining technology.
The most comprehensive solution to manage all your complex and ever-expanding tax and compliance needs.
The industry leader for online information for tax, accounting and finance professionals.
Access unmatched financial data, news and content in a highly-customised workflow experience on desktop, web and mobile.
Browse an unrivalled portfolio of real-time and historical market data and insights from worldwide sources and experts.
Screen for heightened risk individual and entities globally to help uncover hidden risks in business relationships and human networks.
All quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays.
© 2022 Reuters. All rights reserved

source

Share:

More Posts

Market Research

Pulse Surveys

Turn feedback into action

Our survey platform makes it easy to measure and understand feedback so you can drive growth and innovation

Pulse Handshak

Pulse Handshak

Collaborative online survey tool for the market research industry. Remote assisted surveying just like face-to-face interviews. Here interviewers can talk to the respondent over the web-console without the need for any other communication channel and share the same Q're with responses and click actions.

Pulse FE

Pulse FE

Pulse Field Expert or Pulse FE is the main platform for both offline and online survey at softofficepro.com. It is robust and used by hundreds of clients over tens of years with millions of responses. Do it once Q're and deploy on both offline devices (android) and online forms makes it a great cost effective platform for any kind of responses

Pulse Ultimate

Pulse Ultimate

Pulse Ultimate is targeted for tracking studies and retail audits. An offline survey system offering extreme field control including processes like data quality check, back-check, rework, comparison with previous wave data etc. helps to get the best results on a day-to-day basis

Pulse LS

Pulse LS

Use a managed Limesurvey and our expertise for creating complex forms and token based user management. Use optional mailing system to send survey invitation to each participant and track progress of the response status. Industry standard SPSS / R output supported