A person walks previous the Samsung emblem displayed on a glass door on the firm’s Seocho constructing in Seoul on April 7, 2023.
Jung Yeon-je | Afp | Getty Images
Samsung Electronics mentioned it expects a 96% revenue plunge within the second quarter of 2023 as weak demand for reminiscence chips persists.
The world’s largest dynamic random-access chip maker estimates working revenue within the quarter from April to June to be 600 billion Korean gained ($459 million), down from 14.1 trillion Korean gained in the identical interval final 12 months.
This can be the corporate’s lowest quarterly revenue because the 590 billion gained recorded within the first quarter of 2009, based on the corporate’s previous earnings knowledge.
The second-quarter revenue forecast is basically consistent with analysts’ expectations for 555 billion Korean gained, Reuters reported, citing a Refinitiv SmartEstimate.
Samsung additionally estimated income within the second quarter to be 63.75 trillion Korean gained, down 17.4% from 77.2 trillion Korean gained a 12 months in the past.
The firm is ready to launch its full earnings report on July 27.
We assume that the costs can rebound the tip of this 12 months or early subsequent 12 months.
SK Kim
Executive director, Daiwa Capital Markets
During the pandemic-led increase, smartphone and PC producers stockpiled reminiscence chips as demand for shopper units elevated. But these firms are actually grappling with extra chip inventories as shoppers purchase fewer electronics as a consequence of rising inflation. As a end result, costs for reminiscence chips have fallen.
“Demand remained weak. But now the key is the supply [of memory chips]. Samsung Electronics announced the meaningful production cut in early April so we anticipate [that] in third quarter,” SK Kim, government director of Daiwa Securities Capital Markets, instructed CNBC’s “Squawk Box Asia” on Friday.
In April, Samsung mentioned it might be making a “meaningful” lower in reminiscence chip manufacturing, following the lead of smaller rivals resembling SK Hynix and Micron.
“With that, we assume that the prices can rebound the end of this year or early next year,” mentioned Kim.
Kim furthered added that Samsung and SK Hynix, South Korea’s second-largest chipmaker, could profit from the extra demand ensuing from the U.S. barring gross sales of Micron merchandise in China. U.S.-based Micron is the third-largest DRAM chipmaker after Samsung and SK Hynix.
“But at the same time, there’s also the weak demand from China because of the uncertainty in production,” mentioned Kim.
The U.S. granted Samsung and SK Hynix one-year waivers to proceed importing superior instruments for his or her China crops. Those exemptions had been set to run out in October, however the Wall Street Journal reported a U.S. official mentioned they “would be renewed for the foreseeable future.”
In the primary quarter, Samsung reported an working revenue of 640 billion Korean gained million, down from 14.12 trillion gained a 12 months earlier.
Samsung shares fell 2% in Friday morning commerce.
Source: www.cnbc.com