Analysts predict Samsung's third-quarter profits will plunge 80% as chip losses continue

This site reported on October 10 that Samsung Electronics’ third-quarter profit is expected to drop 80% year-on-year, as the continued impact of a global chip oversupply has led to losses in the South Korean technology giant’s cash cow business.

Samsung, the world's largest maker of memory chips, smartphones and televisions, plans to report preliminary third-quarter earnings on Wednesday. Results

According to SmartEstimate forecasts by 19 analysts on the London Stock Exchange, Samsung’s operating profit from July to September may fall to 2.1 trillion won (approximately 11.403 billion yuan). Samsung’s operating profit in the same period last year Profit of 10.85 trillion won

As falling memory chip prices do not recover as quickly as some predicted, Samsung's chip division, traditionally its largest profit-making unit, may report a quarterly loss of 3 trillion to 40,000 yuan. 100 million won

Analysts said that Samsung's reduction in chip production also harmed economies of scale and increased chip manufacturing costs.

After first announcing production cuts in April, analysts said Samsung further cut production in the third quarter to reduce inventory and combat a chip glut that has led to the worst industry recession in decades.

Smartphone and PC makers have been avoiding buying new memory chips due to recession concerns, instead choosing to use up existing inventories within months. Analysts say their inventories are low enough now and demand is expected to rebound early next year. KB Securities said in a recent report that Samsung recently received its first shipment of server memory chips from a North American data center company. orders, giving data center customers hope of buying chips again

Strong demand for memory chips used in artificial intelligence such as high-bandwidth memory (HBM) remains a bright spot, but Samsung is developing such It lags behind rival SK Hynix in terms of chips and in winning customers such as Nvidia, the leader in artificial intelligence chips.

According to the average forecast of five analysts, operating profit of Samsung’s mobile business is expected to be about 3 trillion won. The company launched a high-end foldable smartphone during the quarter, which stimulated sales despite the global smartphone market downturn

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