Samsung soon to emerge as the leading chip maker

After dominating the smartphone market all across the globe, Samsung is all set to emerge as the leading chip maker. It is expected that Samsung will reveal its best-ever quarterly profit in the second quarter with soaring memory chip sales pushing it past Intel Corp as the biggest semiconductor maker by revenue for the first time.

The world’s largest memory chip maker is the among the biggest beneficiaries of soaring demand for processing firepower on smartphones and servers, which has fuelled an industry super-cycle amid limited supply growth.

Underscoring its dominant position, Samsung said it plans to invest some $18.6 billion in South Korea as it seeks to extend its lead in memory chips and next-generation displays for smartphones.

The South Korean tech giant, Asia’s third-largest company by market capitalisation, is now poised to knock Intel off the top of the global semiconductor market-share rankings for the first time since 1991.

“From the second quarter, Samsung will become No. 1 in market share due to the recent increase in data centres and demand for solid-state drives,” NH Investment & Securities analyst Peter Lee wrote in a note to clients.

Samsung’s April-June operating profit is expected to leap 67% from a year earlier to 13.1 trillion won ($11.4 billion), a new high, according to the average forecast from a Thomson Reuters survey of 18 analysts.

The same survey expects July-September profit to be even higher at 13.8 trillion won.

Solid sales of the Galaxy S8 smartphone launched in April likely provided an additional boost, keeping the firm ahead of rival Apple Inc as the world’s top smartphone maker.

samsunggThe S8’s performance has reassured investors whose nerves were shaken last year by the costly withdrawal of Samsung’s premium Galaxy Note 7 due to fire-prone batteries.

Samsung shares are trading at a near-record high of 2.35 million won each as of Tuesday. They have gained 30% so far this year on top of a 43% surge in 2016.
 

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