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Samsung Electronics’ Profits Surge In The Fourth Quarter

Samsung's fourth-quarter profit rises due to high demand for chips and strong profit margins

Samsung Electronics said its operating profit jumped 52% year-on-year to a four-year quarter high, helped by strong demand for server memory chips as well as higher profit margins on chip-making contracts.

The world’s largest smartphone and memory chip maker estimates that profit for the October-December quarter will be KRW 13.8 trillion ($11.5 billion), marking the tech giant’s highest fourth-quarter operating profit since 2017.

However, the results fell short of analysts’ expectations of 15.2 trillion won, which analysts noted was due to things such as employee bonuses, marketing expenses for its mobile phone business and increased display costs during the quarter.

Revenue will likely grow by 23% compared to the same period a year ago, to reach 76 trillion won, according to the company’s preliminary report, in line with market expectations, but Samsung is supposed to reveal full details of the results on January 27, knowing that the results of the previous quarter did not satisfy the investors. Read more [Samsung Stock Tumbles After Its Third Quarter Results].

Although memory chip prices fell over the past quarter, higher demand from server customers drove up Samsung’s shipments on a quarterly basis for both DRAM chips, which are widely used in data centers, and NAND memory chips used to store data in technology devices.

Following the news, Samsung’s stock rose by 1.3% during morning trading.

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