By Joyce Lee

SEOUL (Reuters) – Samsung Electronics Co Ltd (OTC) is expected to report its largest quarterly profit for three years, and record revenues, based on the rising price of memory chips and strong sales of its latest foldable smartphones. Analysts’ estimations show that.

According to Refinitiv SmartEstimate 16 analysts calculated that operating profit of the largest memory chip maker and smartphone manufacturer likely rose to 16.1 trillion won ($14billion) during the September quarter.

This would mean that the revenue will be 30% higher than 12.35 trillion won last year and it is the most since the third quarter 2018. It is likely that revenue rose 11%, to 74.6 trillion won. A record.

Samsung’s (KS:), shares and results were influenced by a global shortage of semiconductor chips. This pandemic led to a remarkable rise in share prices and profits, which reached a new record at the beginning of 2021.

However, the stock dropped after September’s losses when U.S. peer Micron (NASDAQ) said that memory chip shipments could fall. The warning came amid concerns in the industry that chip prices may tumble following a July-September peak.

“Samsung shares have fallen due to Micron’s guidance but unlike Micron, Samsung internalises major components … and has other businesses like mobile and foundry to buoy performance,” said Hanwha Investment & Securities analyst Lee Soon-hak.

Lee stated that the “chip” prices of memory are expected to rebound in next year, after a period of declining.

Samsung will release preliminary results Friday.

SMARTPHONES, CHIP DIVISION

The average forecast of six analysts shows that Samsung’s chip business is expected to post an operating profit of 9.9 trillion won. This figure represents a 79% increase over the previous year due to rising prices for memory chips and increased shipments.

Trendforce data shows that prices of DRAM chip, which are used in mobile devices and servers, increased 7.9% over the June quarter. However, NAND flash price rose 5.5% to serve the data storage market, according to Trendforce data.

As clients scramble to get production capacity, analysts also predict a double-digit operating profit for Samsung’s contract chip manufacturing business.

Analysts estimated that mobile revenue was likely to have been 3.7 trillion, up from 4.45 billion won last year but down from 3.2 trillion earned on folding smartphones.

In the month that followed launch of Galaxy Z Fold 3 and Z Flip 3 in late August sales were estimated at 2,000,000, according to Jene Park, Counterpoint senior research analyst.

After sources indicated that Samsung was getting closer to finalising construction of its $17 billion U.S.-based semiconductor plant, market participants will search Samsung’s results for updates later in the month.

$1 = 1.187.9300 won