Samsung predicts profit increase

Electronics giant Samsung expects to increase its profits for the first quarter of 2020, largely due to a steady demand for memory chips amid the novel coronavirus pandemic.

Profits from its core businesses will increase by 2.7 per cent year-on-year to 6.4 trillion won (5.31 billion dollars), the South Korean company announced on Tuesday in its quarterly earnings outlook, Deutsche press agency (DPA) reported.

The figures were slightly above market expectations. 

Samsung expects sales to increase by 5 per cent to 55 trillion won. The group said it will present more detailed figures at a later date.

Observers in South Korea have predicted Samsung will benefit from increasing online activity as people stay home, which will likely lead to high demand for memory chips for data centres and cloud services. 

Samsung is likely to feel a negative impact of the pandemic on its smartphone and home appliance business, as the factories producing them closed temporarily, as did retail stores. 

Even before the global coronavirus crisis, confidence in the semiconductor industry had grown, with analysts predicting prices would recover in 2020 after a weak previous year.

Oversupply and the trade dispute between the United States and China have been weighing on the industry for some time.

Samsung earns significantly more from semiconductors than any other part of its business.