Samsung’s Quarterly Earnings Report Suggests Chip Industry Recovery

Samsung Electronics has reported a reduced decline in quarterly profit, indicating a potential turning point for the global semiconductor market, according to Bloomberg.

The company’s shares surged by as much as 4.4%, their most significant gain in over a month, as investors found solace in the fact that the 78% drop in operating income was not as severe as expected.

Samsung, South Korea’s largest company, has been grappling with a challenging period in the industry, just like its smaller competitors SK Hynix Inc. and Micron Technology Inc.

The drop in demand for gadgets and an excess of chip inventory prompted major customers, including personal computer and smartphone manufacturers, to trim their orders.

Preliminary results from Samsung reveal that operating income fell to approximately 2.4 trillion won ($1.8 billion) due to a 13% sales decrease in the three months leading up to September.

While these numbers align with analysts’ predictions, they represent a notable improvement from the previous quarter, which saw a staggering 95% year-on-year decline.

Industry experts believe that Samsung’s semiconductor business may have reached its lowest point, and a recovery is anticipated in the fourth quarter.

Recently, the United States granted exemptions to Samsung and Hynix, allowing them to acquire the necessary equipment for their chipmaking operations in China.

Samsung is now positioning itself to benefit from the growing demand in AI-related technology, driven by the excitement surrounding OpenAI’s ChatGPT.

However, in the realm of AI tool development, Samsung is playing catch-up to Hynix, the primary supplier of next-generation DRAM for AI chipmaker Nvidia Corp.

Investors eagerly await Samsung’s upcoming earnings report, which is expected to provide a more comprehensive overview of the company’s financial performance.