Samsung Electronics Co Ltd’s ( 005930.KS ) third-quarter profit could fall 25%, the first year-over-year decline in nearly three years, as the economic downturn dampened demand for electronic devices and the chips that power them. has reduced
Global inflation is on the rise, central banks are aggressively raising interest rates, fears of a recession are rising, and the ever-present uncertainty stemming from Russia’s invasion of Ukraine is ever-present. As a result, businesses and consumers alike have reined in spending.
Operating profit at Samsung, the world’s largest memory chip and smartphone maker, likely fell to 11.8 trillion won ($8.3 billion) in the July-September quarter, according to Refinitiv SmartEstimate of 22 analysts.
“As the world’s top memory chip maker, the leader in TV and mobile OLED displays, and the leader in smartphone shipments, Samsung is a key driver for the economy,” said Greg Roh, head of research at Hyundai Motor Securities. is highly sensitive, with profits easily linked to demand.” .
This would be the first drop in profits since the first quarter of 2020, at the start of the pandemic, and the lowest level of quarterly profit since the first quarter of 2021. As of this latest quarter, demand for the device remained strong as people were forced to live on it. The home has added to big profits for the South Korean tech company.
Operating profit for Samsung’s chip business fell by nearly a third to 6.8 trillion won, according to an average of seven estimates.
Prices for some DRAM memory chips, widely used in smartphones and PCs, fell 14 percent in the quarter, while prices for NAND flash chips, used in data storage, fell 8 percent, according to TrendForce data. happened
Shares in Samsung, which will announce preliminary results on Friday at around 8.40am local time (2340 GMT on Thursday), have fallen around 30% this year. That compares with a 37% decline in the Philadelphia Semiconductor Index (.SOX).
Samsung’s mobile business is also expected to see a 17 percent drop in profits to 2.8 trillion won, although the average selling price of the company’s pricier new foldable phones rose during the quarter. .
Kim Yang-jae, an analyst at Dow Investments and Securities, estimated that Samsung’s smartphone shipments fell 11 percent to about 62.6 million units from the same period a year ago, following a drop in orders from distribution channels. Reached smart phones.
Memory chip rival Micron Technology ( MU.O ) last week significantly cut its investment for next year and warned of tough times ahead.
