Samsung Electronics is predicted to report its smallest revenue drop in six quarters, analysts estimate, as a rebound in semiconductor costs shrinks losses within the South Korean firm’s mainstay chip division.
The world’s largest maker of reminiscence chips, smartphones and televisions is predicted to point out a 14 per cent fall in fourth-quarter revenue when it publicizes preliminary earnings on Tuesday.
Working revenue probably fell to three.7 trillion received (US$2.82 billion) within the October-December quarter, in keeping with the common of an LSEG SmartEstimate from 30 analysts, weighted towards those that are extra persistently correct.
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That might evaluate with an working revenue of 4.31 trillion received within the December quarter of the earlier 12 months. Samsung final reported a year-on-year quarterly revenue improve for the second quarter of 2022.
A strong set of outcomes would justify Samsung’s sharp inventory market run-up within the fourth quarter, which has made it Asia’s second-most helpful listed firm after Taiwanese rival TSMC, with a market capitalisation of about US$390 billion.
Samsung’s chip division – historically its largest earner – probably lowered its quarterly loss to round 1.2 trillion received, in keeping with a median of eight forecasts. Analysts stated its Dynamic Random Entry Reminiscence (DRAM) chips enterprise returned to a revenue.
Samsung had reported chip division losses of 4.36 trillion received and three.75 trillion received within the second and third quarters, respectively, as a chip glut from sluggish demand for devices pushed by inflation pressures on customers precipitated the worst {industry} downturn in a long time.
Nevertheless, costs of DRAM chips – utilized in tech gadgets – and NAND flash chips – used to retailer knowledge – rebounded within the December quarter, together with for older chips, in an indication of an industry-wide restoration anticipated this 12 months.
Cell DRAM chip costs rose an estimated 18 to 23 per cent in the course of the fourth quarter, whereas cell NAND flash chip costs rose 10 to fifteen per cent, in keeping with knowledge supplier TrendForce.
Whereas Samsung has repeatedly lower manufacturing because the first half of 2023 to deal with the downturn, analysts and sources stated Samsung took in additional provide of silicon wafers, the constructing blocks for semiconductors, within the fourth quarter, signalling it’s gearing as much as improve DRAM chip manufacturing.
Samsung was additionally extra aggressive in promoting reminiscence chips than rivals similar to SK Hynix within the fourth quarter in a bid to decrease stock, analysts stated.
Rival Micron Know-how forecast a quarterly income above market estimates final month, in an indication of a restoration within the reminiscence chip market in 2024.
Samsung’s cell enterprise probably noticed an working revenue of round 2.5 trillion received, in keeping with a median of forecasts from eight analysts, as shipments of its two flagship foldable fashions have been estimated to have fallen about 1 million models every versus the third quarter.
