A person walks previous the Samsung brand 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 stated 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 could be the corporate’s lowest quarterly revenue for the reason that 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 about 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 client gadgets elevated. But these firms at the moment are grappling with extra chip inventories as shoppers purchase fewer electronics as a result of rising inflation. As a consequence, 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, informed CNBC’s “Squawk Box Asia” on Friday.
In April, Samsung stated it will be making a “meaningful” reduce in reminiscence chip manufacturing, following the lead of smaller rivals corresponding to SK Hynix and Micron.
“With that, we assume that the prices can rebound the end of this year or early next year,” stated Kim.
Kim furthered added that Samsung and SK Hynix, South Korea’s second-largest chipmaker, might 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,” stated 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 have been set to run out in October, however the Wall Street Journal reported a U.S. official stated 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”