Samsung forecasts high chip demand, even better smartphone sales

By Nikita Chaurasia  Date: 2021-01-29

Samsung forecasts high chip demand, even better smartphone sales

South Korean multinational electronics giant Samsung Electronics Co. Ltd. has reportedly stated that there will be a high demand for its chipsets during Q1 2021 as well as even better smartphone sales following the launch of its flagship Galaxy S21 phone lineup.

Like many others, Samsung has benefited from the stay-at-home trend amidst the global pandemic that has propelled the demand for smartphones and home appliances. The world’s leading memory chips maker, however, had raised a concern that a stronger current and costs associated with new chip production would result in weaker profits, after a 26% jump in operating profit in the last quarter of 2020, cited trusted sources.

Despite the announcement of a one-time special dividend of USD 9.60 billion due to a stronger cash flow than expected, Samsung’s shares still fell by 1.5% in the early hours of trading given the rising tension around the equity market bubble.

Samsung CFO, Choi Yoon-ho, on the subject, said that the inflow of cash over the past three years was large because the company could not produce meaningful M&A activities. In this context, she added that M&A activity of substantial size is likely in the coming three years.

According to reliable sources, Samsung investors have boosted the stock up around 60% since September, largely due to the dominance of its chip contract manufacturing business which is thriving due to the chip shortage crisis and limited manufacturing capabilities of end-users.

It is worth noting that Samsung’s fourth-quarter operating profit spiked to USD 8.17 billion, from USD 6.44 billion a year earlier. Whereas, revenue increased 3% to USD 55.15 billion and net profit climbed 26% to USD 5.9 billion, confirmed sources.

Samsung also announced a three-year shareholder return policy, bringing the regular dividend to a yearly total of USD 8.77 billion for 2021-2023. In this context, the electronics giant will continue to pay 50% of the free cash flow generated during this period, just like the last three years.

Sources Credits –

https://www.reuters.com/article/us-samsung-elec-results/samsung-electronics-sees-solid-chip-demand-stronger-phone-sales-in-first-quarter-idUSKBN29X00I

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Nikita Chaurasia     aeresearch.net

Nikita Chaurasia

An accomplished professional in the field of content development, playing with words comes naturally to Nikita Chaurasia. After completing her post-graduate MBA degree in Advertising and PR, Nikita worked across numerous content-driven verticals, undertaking diverse r...

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