Analysts warn of an 80% hit to Samsung’s profit in Q3

October 10, 2023 09:12 AM PDT | By Invezz

Analysts warn of an 80% hit to Samsung’s profit in Q3 — Image source: Invezz

Samsung to see weakness in its semiconductor business

The consumer electronics behemoth will report 2.3 trillion Korean won ($1.7 billion) in operating profit for the September quarter, as per analysts polled by LSEG.

If true, that would mean a 78.7% annualised decline. Their consensus for revenue now sits at 67.8 trillion won or down 11.6% on a year-over-year basis.

Experts are convinced that much of the weakness will be attributed to the company’s semiconductor business – which they warned could lose 3.0 trillion won in the third quarter.

That segment typically is the cash cow for Samsung Electronics that recently said it will start mass producing 2-nm chips in 2025 as Invezz reported here.

The growth of Chinese companies in the foldable smartphone market is remarkable.

Omdia reported that in the second quarter of this year, Huawei's market share in foldable phone shipments reached 22%, coming close to Samsung Electronics' market share of 26.7%. Oppo secured the… pic.twitter.com/WHZauDBCYb

— Revegnus (@Tech_Reve) October 1, 2023

Could AI help Samsung Electronics moving forward?

Samsung Electronics – the world’s largest maker of memory chips has been struggling this year on a steep decline in prices due to oversupply and under demand.

It had expected a pick-up in the back half of this year but that doesn’t seem to be playing out at a material pace so far. It even slashed production to revive prices – which also is unlikely to help its Q3 results, as per LSEG polled analysts.

On the plus side, Daiwa Capital Markets analyst SK Kim does expect memory chip prices to pick in the final quarter of this year. He also expects artificial intelligence to be a meaningful tailwind for Samsung Electronics in 2024.

As per a new report, Samsung Electronics will unveil a new ‘cloud gaming platform’ exclusively for Galaxy smartphones and tablets as early as this month.

Users will be able to play AAA titles in real-time through their Samsung smartphones without having to purchase a game… pic.twitter.com/mKrjgJ1Gd8

— Mukul Sharma (@stufflistings) October 4, 2023

Also on Tuesday, Samsung secured indefinite waiver on shipping U.S. chip equipment to its factories in China.

The post Analysts warn of an 80% hit to Samsung’s profit in Q3 appeared first on Invezz

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