Samsung Electronics Co., set to announce its first-quarter earnings guidance next week, may report forecast-beating performance results largely backed by its chip business, industry sources said Friday.

Although the tech giant announces detailed figures of each business later in the month, Samsung's chip business is presumed to be the top contributor for its stellar performance. they said.


Some brokerage houses here expect Samsung's first-quarter operating profit to hover above its previous record of 10.1 trillion won ($9 billion) posted in the third quarter of 2013.

In the fourth quarter of 2016, Samsung's operating profit came at 9.2 trillion won. Of the amount, the chip business garnered 4.9 trillion won, which marks a sharp rise from the comparable figure of 3.6 trillion won in the third quarter of last year.

The global chip prices have been rising since the second half of 2017. According to the industry tracker DRAMeXchange, the price of DDR4, the main dynamic random access memory chips, doubled as of end-February compared to June last year.

Samsung's mobile business, on the other hand, is expected to continue its downbeat mode in the first quarter amid the rising portion of mid-to-low models in its smartphone sales.

High-end smartphones is estimated to have taken up less than 30 percent of Samsung's combined sales of handsets in the first quarter, data compiled by Hana Financial Investment Co. showed earlier this week. It marks the first time that high-end devices, such as the Galaxy S and the Galaxy Note series, failed to account for 30 percent of its entire handset sales.

The dull estimate came as Samsung is still seeking to overcome the aftermath of the Galaxy Note 7, the ill-fated phablet whose production ended last year due to safety issues.

Brokerage houses, however, expect Samsung to begin a full-fledged recovery of its smartphone sales in the second quarter as the Galaxy S8 just showcased this week, reaching out to major markets starting end-April.

"Helped by the Galaxy S8, Samsung's operating profit in the IT & Mobile business will reach 3.9 trillion won in the second quarter, compared to 2 trillion won expected for the first quarter," Dongbu Securities Co. said.

Samsung's IT and Mobile business posted an operating profit of 2.5 trillion won in the fourth quarter of 2016. (Yonhap)