Samsung Electronics shares surged higher in South Korea trading Thursday after the world's biggest chipmaker, and key rival to Apple in the smartphone market, forecast its strongest quarterly profit in four years.
Samsung said profits for its June quarter likely rose 11% last year to $10.7 billion, with revenues rising 21% to $58.58 billion.
Chip sales are likely to have driven the bulk of Samsung's profits, although memory and data center prices are starting to wane in the face of over-stocked customers and cooling demand. The preliminary report is customarily released in early July, with a more detailed update from Samsung expected later in the month.
The stronger-than-expected profits, however, will provide some much-needed confidence for the chip and smartphone sectors, each of which has suffered from supply-chain disruptions and demand erosion as a result of faster consumer price inflation.
Samsung shares closed 3.2% higher in South Korea at 58,200 Korean won each, a move that still leaves the stock with a year-to-date decline of around 25.7%.
U.S. chipmakers were on the rise in pre-market trading, as well, with Intel (INTC) moving 1% higher at $37.35 each and Nvidia (NVDA) up 1.6% at $153.70 each. Qualcomm (QCOM) was marked 0.9% higher at $128.17 each.
Chipmaker Micron Technology (MU) forecast notably weaker-than-expected near term revenues on July 1 amid a pullback in global demand for computers and smartphones.
Micron, which posted non-GAAP earnings of $2.59 per share for the three months ending in May on revenues of $8.64 billion -- both of which topped Street forecasts -- noted the China weakness and a broader pullback in global chip demand will clip earnings growth over the coming months.
Waning demand, however, will likely mean Micron will begin decreasing the amount of chips it produces in the fall, in order to maintain firm pricing, and said it sees revenues for its fiscal fourth quarter at only 7.2 billion, well shy of the Refinitiv forecast of around $9.1 billion, thanks in part to a 30% hit to Micron's overall China sales.
