Samsung expects increased earnings due to rising chip demand: Given the solid demand for chips in the midst of the coronavirus epidemic, Samsung expects higher operating profits in the first quarter of 2020.
The profit from the core businesses will increase by 2.7 percent year-on-year to 6.4 trillion won (about 5.2 billion dollars), the South Korean company said on Tuesday in its earnings outlook. The numbers were therefore slightly above market expectations. Samsung is the market leader in memory chips, smartphones and televisions.
In terms of sales, the South Koreans expect an increase of 5% to 55 trillion won. As usual, the group will only provide more precise business figures at a later date.
The increasing online activites helps Samsung
In South Korea, analysts believe that Samsung will benefit from increasing online activities and the associated strong memory chip demand for data centers and cloud services and thus, expects higher earnings. Millions of people around the world are required to stay at home due to coronavirus. In contrast, Samsung is likely to feel the negative consequences of the Covid-19 pandemic in the business with smartphones and household appliances.
Even before the epidemic, confidence in the semiconductor industry had grown again and analysts expected prices would recover this year after the weak results in the previous year. For a long time, an oversupply and the trade dispute between the USA and China had burdened the industry. Samsung by far earns the most money from semiconductors.