2023-07-08 21:00:00
Samsung Electronics is attempting a rebound in the third quarter following overcoming poor performance in the first half. As an analysis comes out that the performance of the semiconductor division (DS), which was pointed out as the cause of the sluggishness, has confirmed the bottom, the trend of recovery is expected. However, a cautious outlook prevails over the speed of real improvement.
Samsung Electronics was also sluggish in the second quarter as expected. According to the announcement of provisional results for the second quarter on the 7th, Samsung Electronics recorded sales of 60 trillion won and operating profit of 600 billion won. This is lower than the previous quarter (operating profit of 640 billion won), which was the worst evaluation since the first quarter of 2019 (operating profit of 590 billion won). However, it is comforting that it recorded a higher operating profit than the original forecast (200 billion won).
The market’s attention was focused on whether the growth trend would change in the second half. Among them, normalization of the DS division, which is the company’s flagship, is essential. Previously, in the first quarter earnings announcement, Samsung Electronics also announced a policy to cut production to improve semiconductor industry conditions and defend once morest falling prices.
The industry’s evaluation of Samsung Electronics’ second quarter performance is ‘sluggish, but better than expected’. The Galaxy S23 release effect, which was the beotimmog of the first half of the year, is weak, and the ds sector took the floor in a situation where there was no other hojae (DX).
In the stock market, the deficit of the DS division in the second quarter was expected to decrease slightly, resulting in a loss of between 3 trillion and 4 trillion won. The deficit in the first quarter was more than this at 4.58 trillion won. This is attributed to the slowdown in the decline in memory semiconductor prices and the increase in shipments of high value-added memory semiconductors such as DDR5 and high-bandwidth memory (HBM). Kim Dong-won, a researcher at KB Securities, said, “DRAM shipments in the second quarter increased by 20% compared to the previous quarter, so a faster-than-expected improvement in the cost structure is expected.”
The market’s attention was focused on whether the growth trend would change in the second half. Among them, normalization of the DS division, which is the company’s flagship, is essential.
If the loss reduction in the DS division becomes a reality, the ‘semiconductor bottom theory’ is likely to rise. It is expected that demand and supply will stabilize in the second half of the year as the semiconductor inventory level peaks in the second quarter and shows a depletion pattern. Expectations for a recovery in the market are growing as the effect of production cuts by memory semiconductor manufacturers is expected to begin in earnest in the third quarter.
It is also a good thing that the premium smartphone line ‘Galaxy Z Fold 5 · Flip 5’ will be released through the Seoul Unpack event on the 26th of this month. The mobile division (MX) made up for a significant portion of the DS division’s deficit while seeing the effects of the Galaxy S23 line launch earlier this year. Improvements in DS business conditions and new product launches in the MX division are expected to have a positive effect on 3Q earnings.
There is a cautious outlook on the pace of earnings improvement. The key to a rebound in earnings is the recovery of downstream industries such as servers, mobile devices and PCs, which are key demand sources for memory in the future. Although demand is increasing in some markets, such as artificial intelligence (AI), the general opinion is that the clock is still unclear for the entire downstream industry.
Correspondent Cho Jung-hyung jenie@etnews.com
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