Samsung Q3 profit set to slump 80% as chip losses persist
© Reuters. FILE PHOTO: A view shows Samsung Electronics' chip production plant at Pyeongtaek, South Korea, in this handout picture obtained by Reuters on September 7, 2022. Samsung Electronics/Handout via REUTERS /File Photo)' third-quarter profit is expected to drop 80% from a year earlier as the effects of an ongoing global chip glut drive losses in what is normally the South Korean tech giant's cash cow business.
Operating profit likely fell to 2.1 trillion won in the July-September quarter, according to a LSEG SmartEstimate from 19 analysts, weighted toward those who are more consistently accurate.The reversal is because its chip division, traditionally its biggest earner, likely reported quarterly losses of between 3 trillion and 4 trillion won after rock-bottom memory chip prices did not recover as fast as some had predicted.
After first announcing an output cut in April, analysts said Samsung slashed more production in the third quarter to reduce inventory and weather a chip glut driving the worst industry downturn in decades.) forecast a quarterly loss last month, triggering concerns of a sluggish recovery in the memory chip maker's end markets such as data centres.
Their inventories are now low enough that demand is expected to rebound by early next year, analysts said.
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