Global semiconductor giant Samsung Electronics expects third-quarter profits to increase sharply from the previous quarter. On October 11, data disclosed by Samsung Electronics showed that based on the caliber of consolidated financial statements, operating profit in the third quarter of this year was approximately 2.4 trillion won (approximately RMB 13.05 billion), a year-on-year decrease of 77.9%, and a month-on-month increase of 258.2%, exceeding external expectations. This performance also pushed Samsung's stock price up 3.9% in Seoul on Wednesday.
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Yonhap News Agency stated that Samsung’s third fiscal quarter performance improvement was mainly due to a reduction in chip business deficits and better mobile and display performance, which prompted operating profit to exceed 1 trillion won for the first time this year. Revenue in the third quarter was 67 trillion won, a year-on-year decrease of 12.7% and a month-on-month increase of 11.7%.
Samsung Electronics did not release the performance of each department that day. According to brokerage speculation, the Digital Solutions (DS) department responsible for semiconductor projects may suffer losses of 3 trillion to 4 trillion won. The performance of the mobile business (MX) division and the performance of the Samsung Display (SDC) division offset semiconductor losses, driving overall performance to improve.
"Samsung Electronics' performance is better than expected," said Lee Seung-Woo, an analyst at Eugene Investment & Securities. "Judging from Samsung's performance, the memory chip industry has bottomed out."
Samsung Electronics' second quarter financial report released on July 27 showed that the company's operating income was 60 trillion won (approximately RMB 336.4 billion), a year-on-year decrease of 22.28%, and operating profit was 668.5 billion won (approximately RMB 3.76 billion), a year-on-year decrease of 95%, setting a new low in the past 14 years since the single-quarter operating profit of 590 billion won in the first quarter of 2009.
In the second quarter of this year, Samsung's semiconductor business operating profit was -4.36 trillion won (approximately RMB 24.4 billion), which was slightly narrower than the 4.58 trillion won loss in the previous quarter, but far lower than the 9.98 trillion won profit in the same period last year. Revenue was 14.73 trillion won, compared with 28.5 trillion won in the same period last year.
Samsung Electronics said at the time that in the second half of the year, taking into account the intensified production cuts in the chip industry, the market is expected to gradually stabilize, and customers' inventory adjustments may gradually end.
Samsung is the world's major supplier of memory chips, but the continued impact of global chip oversupply has led to losses in Samsung's largest profitable unit, the chip division. After Samsung first announced chip production cuts in April, it cut more production in the third quarter to reduce inventory to cope with the current chip supply glut.
However, analysts also said that the current inventories of downstream manufacturers are low enough, and demand is expected to rebound by early next year. In addition, in a recent KBSecurities report, Samsung recently received its first server memory chip order from a North American data center company in a year.