Thursday, December 1, 2022
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Samsung Q3 earnings look poor due to declining global chip demand

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Due to a recent decline in worldwide demand for memory chips, the third-quarter earnings outlooks for Samsung Electronics and SK Hynix, the world’s top two major chip producers, remain generally bleak, an examination of industry data revealed on Sunday.

Samsung and SK hynix were anticipated to post operating profits of 12.8 trillion won ($9.07 billion) and 2.59 trillion won on a combined basis during the June-September period, respectively, according to Yonhap Infomax’s analysis of earnings outlooks for the two companies by securities companies within the previous month.

Samsung and SK Hynix’s operational profit forecasts indicate 18.6% and 37.8% declines from their respective third-quarter performances from a year earlier.

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The consequences of the increasing worldwide inflationary pressure dampening the demand for memory chips were largely responsible for the anticipated declines in earnings.

Do Hyeon-woo, a semiconductor industry analyst at NH Investment & Securities Co., predicted that Samsung’s third-quarter DRAM shipment volume would fall by 3% and that its average selling price (ASP) for chips would fall by 17%.

DB Financial Investment Co. analyst Eo Gyu-jin estimated that the companies’ profitability would increase beginning in the fourth quarter of 2023, following a forecasted recovery of the global semiconductor industry in the second quarter of the following year.

In the second quarter, Samsung increased its market share in the worldwide semiconductor business, maintaining its leadership position, according to a study report. On the strength of strong server demand, Samsung’s chip sales for the April to June period reached a record quarterly high of $20.3 billion, accounting for 12.8% of the $158.1 billion global total, according to research firm Omdia.

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Nivedita Bangari
Nivedita Bangari
I am a software engineer by profession and technology is my love, learning and playing with new technologies is my passion.

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