What's going on?

Samsung said on Friday that it�s expecting business to have boomed last quarter, and South Korea couldn�t be prouder of its homegrown chipmaking hero.

What does this mean?

Samsung won�t release last quarter�s results officially till the end of January, but it�s already started crunching the numbers. And they�re looking very tidy indeed: the chipmaker is expecting revenue to be 23% higher than the same time in 2020, mainly thanks to surging demand for its chips and smartphones. Its profit is looking even better, with the company forecasting a 52% uptick over the same period. That�s lower than analysts were expecting, but they also hadn�t realized quite how much Samsung would spend on marketing its smartphones � an investment which has the potential to pay off down the line. And even if it doesn�t, Samsung has another tailwind behind it: a Covid outbreak in central China has forced chip production plants to close, which should drag on supply and allow Samsung to up its prices even more.

Why should I care?

The bigger picture: All boom, no bust.
Chipmaking�s been described as a �boom-and-bust� industry, which goes like this: demand surges, chipmakers boost production, chipmakers end up making too many chips, prices crash. But nowadays chips are being used here, there, and everywhere, so there�s far less risk of making �too many�. No wonder, then, that analysts think semiconductors will bring in over $500 billion this year for the first time ever � making it a rare third consecutive year of revenue growth for the industry.

Zooming out: Carmakers are losing out.
Carmakers � which have become one of chipmakers� biggest customers � have been finding it notoriously difficult to get their hands on semiconductors, forcing a good few companies to cut production and lose out on sales. Take Volvo: the Swedish carmaker reported last week that sales fell 18% last month versus the year before, and said the chip shortage was mostly to blame.