Samsung Elec sees tech demand rise in 2022, supply chain challenges

The tech giant said its memory chip business this year “expects server demand to grow, attributed to increase in IT investments and new high-core CPUs,” while mobile chip demand is likely to increase due to expansions of 5G-capable models.

For non-memory chips, Samsung expected supply to remain tight due to rising penetration of 5G, solid high performance computing demand, growing out-sourcing from integrated device manufacturers and continued inventory demand, it said in a statement.

The world’s largest memory chip and smartphone maker posted a 53% rise in fourth-quarter operating profit to 13.9 trillion won ($11.6 billion), helped by brisk sales of memory chips and higher margins in chip contract manufacturing.

Profits at its chip business, its largest division, more than doubled from the same quarter a year ago to 8.84 trillion won.

Still, analysts said the profits were lower than the market had expected due to conservative shipments of memory chips, R&D costs and one-off year-end bonuses.

Net profit rose 64% to 10.8 trillion won. Revenue rose 24% to a record 76.6 trillion won.

Samsung shares fell 0.6% in early trade on Thursday, compared with the wider market’s 0.4% fall.

Samsung said on Wednesday it will unveil its latest flagship smartphone model on Feb. 9.

The new flagship smartphone release during the quarter is expected to lift mobile shipments and margins, analysts said, but a further slight decline in DRAM chip prices is likely to weigh on the tech giant’s profits compared to the previous quarter.

Rival chipmaker Intel forecast on Wednesday first-quarter earnings falling short of Wall Street expectations, as constraints related to persistent global supply chain issues and strong demand for chips continues.

Memory chip rival Micron Technology Inc in December had forecast market-beating sales and profits for its upcoming quarter with chip shortages easing in 2022.

($1 = 1,197.0300 won)

(Reporting by Joyce Lee & Heekyong Yang; editing by Richard Pullin)