Samsung sees part shortages persisting in 2022, strong server chip demand

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SEOUL (REUTERS) – Samsung Electronics reported a 51 per cent rise in quarterly revenue on Thursday (April 28), buoyed by sturdy information centre demand for high-margin reminiscence chips, however cautioned that part shortages will probably proceed within the second half.

The world’s prime reminiscence chip and smartphone maker stated demand for server chips is predicted to be comparatively strong within the second half, however the tempo at which part shortages are resolved will want fixed monitoring.

“While uncertainties related to the macroeconomic environment and geopolitical issues are likely to persist, the company will prioritise increasing the portion of advanced processes for components,” it stated in an announcement.

Samsung’s working revenue rose to 14.1 trillion gained (S$15.4 billion) for the quarter ended March 31, from 9.38 trillion gained a 12 months earlier.

That was its highest first-quarter revenue since 2018, and in keeping with the corporate’s estimate earlier this month.

Profits at its chip enterprise rose to eight.45 trillion gained, greater than double the three.36 trillion gained a 12 months earlier, fuelled by report gross sales of server chips within the quarter.

Memory chip rival SK Hynix on Wednesday forecast strong demand for server chips however warned that gross sales to smartphone and private pc prospects had been softening as a result of Covid-19 led lockdowns in China.

In Samsung’s non-memory chip enterprise, the rising value of older chip fashions in addition to bettering yields at its chip contract manufacturing enterprise lifted its earnings in contrast with the earlier quarter, analysts stated.

Operating revenue at Samsung’s cell and community enterprise got here in at 3.8 trillion gained within the first quarter, slipping from 4.4 trillion gained a 12 months earlier.

Samsung ramped up manufacturing of its mid- to low-end Galaxy A sequence within the quarter to compete aggressively within the phase, whereas launching its flagship Galaxy S22 sequence. It raised its smartphone market share to 24 per cent through the interval from 22 per cent a 12 months earlier, stated Canalys analyst Sanyam Chaurasia.

Overall income rose 19 per cent to a report 77.8 trillion gained.

The firm stated it expects chip demand from server purchasers to stay comparatively strong within the second quarter, and the smartphone market is projected to proceed to develop within the second half of the 12 months.

However, part shortages and lack of capability availability at its chip contract manufacturing amenities are additionally anticipated to proceed.

Analysts stated Samsung’s latest give attention to promoting extra high-margin reminiscence merchandise to prioritise profitability over quantity would finally restrict shipments and assist increase Dram costs later within the 12 months, as would the restricted will increase in chip manufacturing capability as a result of supply delays in chipmaking gear.

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