Samsung’s earnings outlook grim amid poor global chip demand

Seoul : The third-quarter earnings outlooks for Samsung Electronics and SK hynix, the world’s top two leading chip manufacturers, remain largely grim due to a recent fall in global demand for memory chips, an industry data analysis showed on Sunday.According to the analysis by Yonhap Infomax of earnings outlooks for the two companies by securities companies within the past month, Samsung and SK hynix were expected to record operating profits of 12.8 trillion won ($9.07 billion) and 2.59 trillion won on a consolidated basis during the June-September period, respectively.The operating profit predictions of Samsung and SK hynix represent 18.6 per cent and 37.8 per cent drops from their respective third-quarter results from a year ago.The expected declines in earnings were largely attributed to the effects of the growing global inflationary pressure weighing down global demand for memory chips.Do Hyeon-woo, a chip industry analyst at NH Investment & Securities Co, estimated Samsung’s DRAM shipment volume to decrease by 3 percent in the third quarter and expected its average selling price (ASP) of chips to plunge by 17 per cent.Eo Gyu-jin, an analyst at DB Financial Investment Co., predicted the companies’ earnings to rebound starting in the fourth quarter of 2023, following an expected revival of the global chip industry in the second quarter of next year.