Technology giant Samsung Electronics is estimating a 52 per cent increase in its fourth-quarter profits, amid global chip shortage.

In its quarterly earnings guidance, the world’s biggest memory chip maker projected earnings of US$11.5 billion during the last three months of 2021 — which would be its highest fourth-quarter operating profit since 2017.

The company’s earnings were boosted by strong demand for server memory chips and higher profit margins in its chip contract manufacturing business, as well as currency fluctuations.

The Korean won continues to depreciate, making Korea’s exports more attractive on the global market, technology analyst Sam Reynolds indicated.

The South Korean company specialises in the production of a wide variety of consumer and industry electronics, including appliances, digital media devices, semiconductors, memory chips, and integrated systems.

In recent months, the global shortage of semiconductors has been causing major disruptions for manufacturers, from carmakers that have had to suspend production to Apple Inc warning that iPhone shipments would be delayed.

But some analysts expected an even higher jump. Nonetheless, profit expectations miss is mostly due to various costs in the fourth quarter such as employee bonuses, marketing costs for the mobile business and ramp-up costs for new display panels.

Investors are also watching the company’s chip manufacturing operation in Xi’an, central China. The city has been in lockdown since 23 December due to a novel coronavirus outbreak.

Samsung indicated that it would “temporarily adjust operations” at its sites in Xi’an but gave no further details of how the measures could impact the production of microchips.

The full breakdown of the financial results is expected at the end of this month.

Back in November, Samsung announced that it had chosen a site close to the US city of Taylor in Texas for its new US$17-billion computer chip plant, making it the company’s biggest-ever US investment.

The plant is expected to create 2,000 technology industry jobs, with construction starting early this year for the plant to be operational by the second half of 2024.

“With greater manufacturing capacity, we will be able to better serve the needs of our customers and contribute to the stability of the global semiconductor supply chain,” said Kinam Kim, chief executive of Samsung electronics device solutions.

Chips made at the new facility will be used in a range of technologies including mobile, 5G, high-performance computing and artificial intelligence.

Samsung, like several of its rivals, is racing to expand chip making in the US to tackle supply chain issues.

Taiwanese chipmaker TSMC announced a US$100-billion investment in Arizona last year, while US contract semiconductor manufacturer GlobalFoundries announced that it will increase its investment in upstate New York.