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S. Korean chipmakers Samsung & SK Hynix to post upbeat earnings in Q1

Date: March 30, 2022 Meghna Singh Meghna Singh
S. Korean chipmakers Samsung & SK Hynix to post upbeat earnings in Q1 
South Korea based Samsung Electronics Co. and SK Hynix Inc., the two biggest memory chip makers in the world, are expected to report strong earnings during the first quarter of 2022 despite a rise in raw material prices and persistent global supply chain issues.



As per a survey of local brokerage companies conducted by Yonhap Infomax, the financial data arm of Yonhap News Agency, Samsung is anticipated to post operating profits of ₩13.89 trillion (US$11.3 billion) in the first quarter ending March 31, up 38.64% from a year ago, and SK Hynix is anticipated to climb ₩3.1 trillion, up 137.08%.



Samsung's sales for the first quarter are projected to reach ₩75.2 trillion, surpassing ₩70 trillion for the third quarter in a row. It rose 15.02% from the previous year.



SK Hynix is projected to report quarterly sales of ₩11.5 trillion, increasing 36.36% from the same period last year and topping ₩10 trillion for the very first time.



Despite severe external economic conditions, such as unpredictable raw material costs triggered by Russia’s invasion of Ukraine and disruptions in the global supply chain, both Samsung and SK Hynix issued optimistic projections.



Crediting ‘diversified supplies for materials’ and enough inventory of essential materials, the two firms claimed that the crisis in Ukraine had no immediate effect on their chip output. Together, the two chip manufacturers control more than 70% of the global DRAM industry.



A faster-than-expected increase in memory chip prices, despite a prolonged shortfall of chips and robust demand for DRAM being used servers, supports the upbeat outlook.



However, shortages of critical raw materials required in the chipmaking process, like neon, are raising fears of greater chip pricing in the future.



Since the conflict in Ukraine erupted, prices of Chinese industrial-grade neon are said to have soared.



Samsung is said to be having issues improving yield rates for semiconductor process nodes with less than 5 nanometers.



Kyung Kye-hyun, Samsung Electronics co-CEO stated that the firm has progressively refined and stabilized the process, albeit it took a lot of time to scale up capacity given the complexity.



Source credit: http://www.koreaherald.com/view.php?ud=20220329000502&np=1&mp=1

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Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.