Samsung Q3 Profit Seen at Record, but Peaking, as Chips Shine

Samsung Q3 Profit Seen at Record, but Peaking, as Chips Shine

Samsung Q3 Profit Seen at Record, but Peaking, as Chips Shine

Comments Off on Samsung Q3 Profit Seen at Record, but Peaking, as Chips Shine

Samsung Q3 Profit Seen at Record, but Peaking, as Chips Shine

Samsung Electronics Co is set to post a hefty jump in third-quarter profit to record levels after its chip unit put in a sterling performance on demand from data centres and improved production yields.

The July-September quarter is, however, expected to mark a peak in earnings as a two-year super cycle of tight supply and soaring demand comes to an end, with prices of some types of chips already sliding sharply.

The world’s top memory chipmaker, due to report preliminary results on October 5, is forecast to book an 18 percent surge in operating profit to KRW 17.2 trillion ($15.5 billion), a Refinitiv poll of 15 analysts showed. Revenue is seen climbing 3.7 percent.

That handily beats operating profit growth of 6 percent in the previous quarter when its Galaxy S9 device missed sales targets and competition from cheaper Chinese-made phones ate into margins for its mobile business.

But prices for NAND chips, used for longer-term data storage, more than halved in the same period as supply swamped demand. Those drops are expected to accelerate, while most analysts also predict DRAM prices will begin to decline.

“Starting in the fourth quarter, I expect DRAM prices to fall by around 10 percent. That will hurt Samsung’s operating margin,” said Eo Kyu-jin, an analyst at eBest Investment & Securities.

While Samsung is forecast to still book decent operating profit growth of 12 percent in the fourth quarter, analysts predict minimal profit growth in the first half of 2019 followed by profit declines, albeit small ones, in the second half, Refinitiv data showed.

Even so, Samsung is expected to weather drops in DRAM chip prices better than rivals due to gains in production technology that allow it make smaller and faster chips per silicon wafer.

“Even though the average selling price will decline next year, Samsung’s memory chip business will still have solid profits due to cost-saving measures,” said Avril Wu, senior research director at DRAMeXchange.

While its chip unit accounts for nearly 80 percent of operating profit, Samsung will also benefit from a rebound in prices for large displays, as well as increased orders for organic light-emitting diode (OLED) displays after Apple launched new iPhones.

Samsung’s display unit is expected to post about KRW 812 billion ($730 million) in quarterly operating profit, down 19 percent from a year earlier but more than five times the prior quarter.

It will, however, have to deal with more competition next year as rivals from China and South Korea have started or plan to begin mass production of small-sized flexible OLED panels.

Its mobile division will see operating profit drop for a third quarter in a row, hurt by sluggish demand for smartphones as the market matures. Marketing costs for its new Galaxy Note series also pressured mobile earnings, analysts said.

admin

Related Posts

Samsung Galaxy S10 Tipped to Have a Display Hole, Triple Camera Setup

Comments Off on Samsung Galaxy S10 Tipped to Have a Display Hole, Triple Camera Setup

Samsung Opens AI Research Centre in New York, Will Focus on Robotics Research

Comments Off on Samsung Opens AI Research Centre in New York, Will Focus on Robotics Research

Samsung to revamp their mid-range smartphones in India with more premium features

Comments Off on Samsung to revamp their mid-range smartphones in India with more premium features

Samsung Galaxy S10 to Have 2 In-Display Fingerprint Sensor Suppliers: Report

Comments Off on Samsung Galaxy S10 to Have 2 In-Display Fingerprint Sensor Suppliers: Report

Samsung Galaxy S10 Said to Sport Galaxy A8s’ Selfie Camera Gestures, Animation, Introduce ‘Sound on Display’ Technology

Comments Off on Samsung Galaxy S10 Said to Sport Galaxy A8s’ Selfie Camera Gestures, Animation, Introduce ‘Sound on Display’ Technology

Samsung Galaxy A8s Launch Set for Today, How to Watch Live Stream

Comments Off on Samsung Galaxy A8s Launch Set for Today, How to Watch Live Stream

Samsung Galaxy S10+ may come with more RAM than most laptops

Comments Off on Samsung Galaxy S10+ may come with more RAM than most laptops

Samsung Galaxy A8s With Infinity-O Display, Triple Rear Cameras Launched: Price, Specifications

Comments Off on Samsung Galaxy A8s With Infinity-O Display, Triple Rear Cameras Launched: Price, Specifications

Samsung Galaxy S10 Will Feature ‘Significant’ Changes, Spotted on Benchmark Site With Taller Display

Comments Off on Samsung Galaxy S10 Will Feature ‘Significant’ Changes, Spotted on Benchmark Site With Taller Display

Samsung Galaxy J6 aka Galaxy On6 Receiving Auto Brightness Feature, Dual VoLTE Support via OTA Update

Comments Off on Samsung Galaxy J6 aka Galaxy On6 Receiving Auto Brightness Feature, Dual VoLTE Support via OTA Update

Samsung Galaxy A8 Star With Infinity Display, Snapdragon 660 SoC Launched in India: Price, Specifications

Comments Off on Samsung Galaxy A8 Star With Infinity Display, Snapdragon 660 SoC Launched in India: Price, Specifications

Samsung Galaxy A9 Star Pro Tipped to Sport 4 Rear Cameras and Bixby Button, Galaxy A7 (2018) With 3 Cameras Leaked

Comments Off on Samsung Galaxy A9 Star Pro Tipped to Sport 4 Rear Cameras and Bixby Button, Galaxy A7 (2018) With 3 Cameras Leaked

Create Account



Log In Your Account