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Samsung says profits likely jumped 44% despite chip supply problems

April 7, 2021. Summarized by summa-bot.

Compression ratio: 63.7%. 1 min read.

SHANGHAI, CHINA - MARCH 18, 2021 - A view of Samsung's flagship store in Shanghai, China, March 18, 2021. South Korea's Samsung plans to spend $116 billion on its next-generation chip business, which includes making contract chips for outside customers. (Photo by Xing Yun / Costfoto/Sipa USA)

Samsung expects to have pulled off a strong first quarter, even as one of its chipmaking facilities was temporarily shut by a brutal US winter storm earlier this year.

Hong Kong (CNN Business)Samsung expects to have pulled off a strong first quarter, even as one of its chipmaking facilities was temporarily shut by a brutal US winter storm earlier this year.

It also expected sales to have climbed about 17% year-on-year, to approximately 65 trillion Korean won ($58. 2 billion).

Samsung's semiconductor plant in Austin, Texas was forced to shut down in February after the state was hit by widespread power outages related to a massive winter storm, but "reached production close to normal levels as of end of March," according to a statement from the company.

Analysts estimate that the disruption cost the company about 400 billion Korean won ($358 million).

The company was scrambling to address the dearth of semiconductors, and could continue to face problems in the second quarter, he added.

But as the situation in Austin continues to improve, recovering output "should start to drive earnings growth for" Samsung's chip division, CW Chung, an analyst at Nomura, wrote in a note to clients on Wednesday.

Nomura's analysts also expect an increase in prices for certain semiconductor components in the second quarter, which they believe could help boost the company's results in the coming months.

The company released its new Galaxy S21 devices this January, earlier than usual, and its "momentum" in the space "should stand out," Lee wrote in a recent research note previewing first quarter performance.

The company will report full results later this month.

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