SEOUL: Samsung Electronics Co Ltd on Thursday forecast stable demand for its chips within the present quarter and stronger cell gross sales after bringing ahead the launch of its flagship Galaxy S smartphone to seize market share.

The world’s high maker of reminiscence chips warned, nonetheless, {that a} stronger foreign money and prices associated to new chip manufacturing would result in a weaker revenue end result, after posting a 26% leap in working revenue within the fourth quarter.

Samsung shares fell 1.5% in early commerce, regardless of saying a one-time particular money dividend of 10.7 trillion gained ($9.60 billion) along with its year-end dividend, on rising jitters about an fairness market bubble.

Traders have pushed the fill up round 60% since September, partly on a bullish outlook for its chip contract manufacturing enterprise, on account of chip shortages and restricted manufacturing capability.

“Wanting forward, Samsung Electronics expects general revenue to weaken within the first quarter of 2021,” the corporate stated in an announcement.

“For 2021, (Samsung) expects a restoration in general international demand however uncertainties persist over the opportunity of recurring COVID-19 waves,” it added.

The leap in working revenue within the October-December quarter got here as robust reminiscence chip shipments and show earnings offset a robust gained, the price of a brand new chip manufacturing line, weaker reminiscence chip costs, and a quarter-on-quarter drop in smartphone shipments.

The South Korean foreign money rose about 7% towards the greenback within the three months to December. A stronger gained erodes the worth of abroad gross sales for South Korean corporations.

DRAM RECOVERY

Whereas comparable foreign money circumstances are anticipated within the short-term, the marketplace for DRAM chips that go into units is predicted to get better throughout the first half of 2021 from cell and server purchasers’ demand, Samsung stated.

“DRAM costs are anticipated to rise a lot greater than anticipated in Q1, as server prospects run out of stock they stockpiled when COVID-19 first broke out in first half of final yr, and begin shopping for once more,” stated Park Sung-soon, an analyst at Cape Funding & Securities.

Samsung’s capital expenditure in 2020 reached 38.5 trillion gained, together with 32.9 trillion gained on semiconductors. Funding in chip contract manufacturing jumped as the corporate expanded a manufacturing facility. Reminiscence chips noticed vital spending development for capability growth and superior course of, it stated.

Samsung’s fourth-quarter working revenue rose to 9.05 trillion gained ($8.17 billion), from 7.2 trillion gained a yr earlier, consistent with the corporate’s estimate earlier this month.

Income on the world’s high maker of reminiscence chips and smartphones rose 3% to 61.6 trillion gained. Internet revenue rose 26% to six.6 trillion gained.

Analysts stated Samsung’s show unit reported higher-than-expected earnings within the December quarter as supplying panels for Apple’s new iPhone stored its OLED manufacturing close to 100% of capability throughout the quarter.

Samsung introduced a three-year shareholder return coverage that can improve common dividend to an annual whole of 9.Eight trillion gained for 2021-2023.

It should proceed to pay out 50% of the free money movement (FCF) generated within the interval, as within the earlier three years.

($1 = 1,114.0900 gained)



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