Samsung Electronics Reports Sequential Improvements in Q3 Sales and Operating Profit

by Warren Seah

By Kwanwoo Jun

Samsung Electronics, the South Korean tech giant, has announced positive sequential improvements in its third-quarter sales and operating profit. This news has sparked hopes that the severe downturn in the chip industry may be coming to an end.

In a preliminary earnings forecast released on Wednesday, Samsung revealed that its operating profit for the latest quarter is estimated to be 2.4 trillion won ($1.79 billion). While this figure is down from 10.852 trillion won a year ago, it is approximately three times the amounts recorded in the first and second quarters of this year.

Additionally, Samsung anticipates booking revenue of 67 trillion won in the third quarter. Although this represents a 13% decrease from the previous year, it is an improvement from the first two quarters of 2023.

The positive news from Samsung has resulted in a 2.7% increase in its shares, outperforming the local index. Market analysts have expressed optimism about chip prices stabilizing and starting to rebound.

Jung Min-gyu, an analyst with Seoul-based Sangsangin Investment & Securities, states that the rally in Samsung’s shares reflects growing consensus that dynamic random access memory (DRAM) chip prices are on the rise. Jung highlights that Samsung began reducing memory-chip production in late April, and the impact of these output reductions typically takes effect after one to two quarters.

Despite being impacted by the global tech-industry downturn, Samsung has taken steps to mitigate its losses and support chip prices. The company has reduced semiconductor output to manage inventory while meeting demand for powerful computing chips in the artificial intelligence sector.

Analysts from Daishin Securities, Kangho Park, and Wi Min-bok, suggest that Samsung’s earnings growth is expected to accelerate with rising chip prices. They anticipate that operating profit for the final quarter of the year may exceed 3.4 trillion won.

Samsung is set to release its full third-quarter earnings report later this month.

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