Samsung Electronics said Wednesday its third-quarter operating profit plunged by 77.9% to $1.8 billion (2.4 trillion won) from $8.1 billion for the same period a year ago, hit by a fall in memory chip prices.
The world’s largest smartphone and memory chip maker said in its preliminary report that consolidated sales revenue for the July-September quarter declined to $50 billion from $57 billion for the year-ago period.
However, despite a dip in net earnings, the company’s shares rose 3.2% on the Korea Exchange (KRT) as of 9:45 am GST.
Although the profit for the quarter plummeted compared to the year-ago period, it is well above the $524 million profit for the previous quarter. Samsung Electronics posted $47.2 billion in revenue in the second quarter.
A Reuters report Wednesday said the memory chip market shows early signs of recovering from a severe downturn.
“It’s better than expected. Although the situation is not great in the chip business… the decline in memory prices is easing, and further drops will be limited,” Ko Yeongmin, an analyst at Daol Investment & Securities, told Reuters.
Demand for memory chips shot up at the height of the COVID-19 pandemic and shortages were felt across the globe as consumers purchased new electronic devices to use at home for remote work or online classes.
As the high interest rates and a global economic slowdown have adversely affected the demand for most consumer goods subsequently, chipmakers were struggling to balance their inventories, which prompted them to cut production. The technology giant in April said it expects a recovery in chip demand in the second half of the year.
$230 billion: That's the capital expenditure of five semiconductor plants planned by Samsung Electronics in South Korea by 2042, the electronics giant reportedly said in March this year.
The development of this base is part of South Korea's plan to gain an upper hand in the non-memory chip field, currently dominated by chipmakers such as Taiwan Semiconductor Manufacturing Co and US-based Intel.
Samsung Electronics Executive Chairman Jay Y Lee has a real-time net worth of $8.4 billion as of October 11, 2023, according to Forbes estimates.
