Samsung’s chip division is the wind in its sails

The Galaxy S8 has the potential to beat the sales record of its predecessor.

 

Samsung’s chip division is all set to propel the South Korean tech giant to new heights for its first quarters in 2017. The quarter could potentially turn out to be sweeter than expected if its flagship, Galaxy S8, turns out to be a success.

Increased demands from servers and smartphones have created a boom in the memory chip market which Samsung has used to tide over its costly failure of the Galaxy Note 7.

However, there are dark clouds on the horizon with the company’s vice Chairman, Jay Y. Lee being on trial for bribery and other charges linked to a corruption scandal that has already cost South Korean President Park Geun-hye her presidency.

Despite the outbreak of the scandal, Samsung’s shares are near their record high and have gained 17% so far this year. In 2016, Samsung’s shares had surged by 43%.

“Right now it’s about as good as it gets for Samsung,” said Park Jung-hoon, fund manager at Samsung shareholder HDC Asset Management.

The company will issue an earnings guidance later this this Friday.

Keeping in view Samsung’s padded margins, analysts expect the demand for NAND flash chips, in the long term, to be tight. This means Samsung’s mobile division will have to shoulder the load of propelling it forward.

Samsung’s new flagship, the Galaxy S8, has been extensively praised at its launch on March 29 in NY.

Many analysts expect the new flagship to beat its predecessor’s sales record.

“We think the S8 series will definitely be a strong flagship for Samsung and help it gain back market share,” said Tom Kang, an analyst at Counterpoint.

He went on to add, “The launch of the fully revamped iPhone 8 will also be threatening. But there is also pent up demand for Samsung devices rolling over from last year due to the disappearance of the Note 7. So those 2 factors will balance out.”

This coming Friday, Samsung will provide revenue and operating profit estimates for January-March. It will provide a details later this month.

 

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