Memory chip demand continues to be strong Samsung is expected to release the strongest Q4 financial report in history

Samsung Electronics, the world's largest memory chip and smartphone maker, will release its fourth-quarter earnings report on Friday, with analysts expecting it to report record fourth-quarter profits due to strong demand for memory chips and rising margins in foundry manufacturing.

According to 14 analysts from Refinitiv, Samsung Electronics' operating profit is expected to reach 15.2 trillion won (80.85 billion yuan) in the fourth quarter ending December last year. This will increase by 68% from 9.05 trillion won in the same period last year and slightly higher than the record 15.15 trillion won in the fourth quarter of 2017.

Samsung Electronics' shares have risen about 12% in the past two months as the market anticipated the company's good performance and as memory chip prices are expected to continue to rise this year due to continued strong demand for video, gaming, conferencing and other streaming services.

"Contrary to previous concerns, the semiconductor industry is likely to see a sharp increase in demand from customers in both storage and non-storage fields," said Jeff Kim, an analyst at KB Securities.

“As of December, orders for memory chips from major North American data center companies such as Amazon, Microsoft and Meta have steadily increased,” he predicted. “Samsung Electronics’ foundry business will receive orders for the next two years.”

This view is supported by the latest financial report of semiconductor company Micron Technology, which released its December financial report with better-than-expected profits and a positive outlook for the next quarter.

Analysts believe that with increased deliveries and higher prices, the profitability of Samsung's chip foundry business has also increased significantly from the previous quarter, with an operating profit margin of 10%-20%.

Samsung's overall chip profit in the fourth quarter could reach 9.7 trillion won (51.5 billion yuan), more than double last year's 3.85 trillion won, according to the average forecast of five analysts.

For Samsung's mobile business, which was recently merged with its TV and home appliance businesses into a separate Device Experience unit, analysts said phone shipments may have risen slightly from the previous quarter as component shortages eased.

According to the average forecast of five analysts, the operating profit of the mobile business may be around 3 trillion won (about 15.9 billion yuan), an increase of about 24% year-on-year.