The rising prices of semiconductors have helped Samsung achieve its highest quarterly profit since 2018, according to new financial guidance published by the company.
Samsung’s Q3 operating profit increased by 27.9% to 15.8 trillion Korean won (£9.7 billion) from the same period last year, and by 26% from the second quarter of 2021.
This makes it the highest operating profit since the third quarter of 2018, when Samsung reported a profit of over 17.5 trillion won (£10.7 billion).
Today’s success was attributed to chip price inflation, caused by the high demand for semiconductors as the global shortage continues to affect the tech and automotive industries, as well as an uptick in the company's display business.
Both chips and displays are part of the Device Solutions division, which in Q2 was responsible for almost half of Samsung’s total revenue. The profit recorded in the second quarter of 2021 was also found to be the highest in three years at the time, generating a profit of 12.5 trillion won (£7.6 billion).
Samsung hasn’t yet released the full Q3 financial results by business unit, with further information expected by the end of October. However, analysts estimate that the tech giant’s chip unit alone is likely to have experienced a 79% jump in operating profit from a year earlier, according to Reuters’ reports.
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Despite the rising profits, today’s financial guidance falls slightly short of analyst expectations. Financial analysis by Refinitiv previously estimated the operating profit to reach 16.1 trillion won (£9.9 billion). Following the news, Samsung’s shares were reported to slump by 11% year-to-date, according to CNBC.
The financial guidance for Q3 comes amid reports that Samsung is close to finalising the construction of a $17 billion semiconductor factory in Taylor, Texas, according to three people with knowledge of the matter who spoke to Reuters. In a filing, the tech giant stated that the new plant would focus on manufacturing advanced logic semiconductor chips and create approximately 1,800 new jobs.
This is in line with previous plans outlined by the company to invest 240 trillion won (roughly £150 billion) in semiconductors, biopharmaceuticals, and next-generation networking, among other key strategic areas, over the next three years.
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