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 Tab S4 With Super AMOLED Display, S Pen Support Launched in India

Comments Off on Samsung Galaxy Tab S4 With Super AMOLED Display, S Pen Support Launched in India

Samsung Galaxy S10’s Exynos 9820 SoC With Integrated NPU, 8K Video Recording Launched

Comments Off on Samsung Galaxy S10’s Exynos 9820 SoC With Integrated NPU, 8K Video Recording Launched

Samsung One UI Update to Offer More Customisation for Themes, Galaxy S9 Gets Hotfix Beta Update to Fix Reception Issues

Comments Off on Samsung One UI Update to Offer More Customisation for Themes, Galaxy S9 Gets Hotfix Beta Update to Fix Reception Issues

Samsung Galaxy A8s With a Display Hole Design for Selfie Camera Teased

Comments Off on Samsung Galaxy A8s With a Display Hole Design for Selfie Camera Teased

Samsung Galaxy S7 Vulnerable to Hacking Thanks to Meltdown Chip Security Flaw: Researchers

Comments Off on Samsung Galaxy S7 Vulnerable to Hacking Thanks to Meltdown Chip Security Flaw: Researchers

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 S10, Samsung Galaxy S10 Lite Leaked in Renders Yet Again

Comments Off on Samsung Galaxy S10, Samsung Galaxy S10 Lite Leaked in Renders Yet Again

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 Galaxy J7 Duo, Galaxy J6 Get Price Cuts in India

Comments Off on Samsung Galaxy J7 Duo, Galaxy J6 Get Price Cuts in India

Samsung Galaxy S10 Variant to Feature 5 Cameras: Report

Comments Off on Samsung Galaxy S10 Variant to Feature 5 Cameras: Report

Samsung, Xiaomi Take 30 Percent Share Each of Indian Smartphone Market in Q2: Canalys

Comments Off on Samsung, Xiaomi Take 30 Percent Share Each of Indian Smartphone Market in Q2: Canalys

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