Remember, Remember

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What's going on?

Samsung reported its highest quarterly profit in three years on Friday, and the electronics giant is never going to want to forget these memory chip shortages.

What does this mean?

The world’s in seriously short supply of memory chips right now, which has sent prices skyrocketing. That suits Samsung just fine: it’s both the world’s biggest maker of memory chips and makes most of its money from that part of its business. Mix in strong demand for its other products, and its profit came in 28% higher last quarter than the same time a year ago.

But that momentum sounds like it might not last: analysts are expecting Samsung’s profits to fall this quarter. That’s partly because the dwindling WFH boom means workers are buying fewer gadgets for their home offices, and partly because rising inflation is increasingly putting shoppers off pricey electronics. That might be why Samsung’s stock barely moved after the announcement.

Why should I care?

The bigger picture: TSMC gets in the holiday spirit. 

TSMC – the world’s biggest contract chipmaker – is having a field day too: its revenue last quarter was 20% higher than the same time last year. That’s particularly impressive considering the company’s been focusing its resources on lower-priced chips for the carmaking industry, rather than more profitable ones for the tech sector. That, at a time when it’d usually be diverting more of its resources to help those companies build Christmas’s must-have gadgets.

Zooming out: If it’s not chips, it’s ships.

Speaking of carmakers, Tesla said last week that the chip shortage was one of the biggest risks facing the company right now, and that it might get in the way of its ambitious goal to grow sales by 50% a year. But it’s not just chips threatening Tesla’s plans: a lack of cargo ships means the EV maker’s struggling to get parts delivered where they need them.

Originally posted as part of the Finimize daily email.

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