Samsung’s advantages increase as the Covid-19 reboot increases the demand for semiconductor

Samsung Electronics estimates that their fourth-quarter profits jumped 52.5 percent from the high demand for memory chip servers and extended contract chip production plans, which increases the promise of recovery for semiconductor prices.

Working profits for the world’s largest manufacturers of computers and mobile phones were expected at Won13.8tn ($ 11.5bn) quarter ended in December, but much lower than Won15.2tn predicted by Refinitiv, possibly due to bonuses special for employees. Sales were compared to Won76tn, up 23.5 percent from last year.

The profits of South Korean companies are ready to add this year after down in the first quarter, experts said. Chip prices are expected to rise to the second quarter, among other things due to a decline in production at Samsung’s factory in Xi’an, China, which is under Covid-19 Lockdown.

“Chip prices should be slightly lower than expected in the first phase and will start rising again in the second phase due to the shortage of Xi’an factories,” said CW Chung, chief research officer at Nomura in Seoul.

Samsung’s lucrative improvement came after Micron Technology released more money than expected last month and predicted a cash flow rate for 2022. Samsung will announce its detailed findings later this month.

Prospects for chip price recovery after temporary decrease pushed the shares of Samsung to more than 10 percent in recent months, as demand for data warehousing and promotional services jumped and the resumption of Covid’s global rise. Samsung shares rose 1.8 percent Friday morning.

Samsung, which competes with chipmaker Taiwan Semiconductor Manufacturing Co., has also benefited from an increase in its business rules, which make semiconductors for other people. But worldwide the non-memory chip crunch has been affected all from cars for consumer electronics has come down gradually.

Researchers say Samsung has won two years from 2023 and that the share limit reached 10-20%. The company is also planning to invest $ 17bn in new US factory for contract chip production.

“External risks such as the resumption of Covid-19 and stock losses are still high but the worst seems to be over,” said Park Sung-soon, a researcher at Cape Investment & Securities, in a recent report. “The company is seeing an increase in pre-order orders from major customers this year.”

Experts say closed in Xi’an was to fix the price of Dram chips and Nand flash memory, which led retailers to delay negotiations in anticipation of higher prices. Dram chips support temporary storage of photos, phones and servers, while Nand chips allow files and data to be stored without power.

Samsung has two production lines in Xi’an, which make up 42.5 percent of Nand flash memory, according to TrendForce.

Experts also expect Samsung’s mobile spending to slow down. The company phone foldable sales are expected to double or triple to 15m-20m units this year, as they expect to send more than 300m phones, about 10 percent from last year.