Samsung Q3 profit beats expectations, signaling chip recovery
Samsung Electronics' third-quarter profit beats expectations despite a 78% drop
Samsung Electronics, the world's largest memory chip and smartphone maker, reported a preliminary third-quarter operating profit of 2.4 trillion won ($1.79 billion), down 78% from the same period last year. The result beat analyst expectations, however, as the battered memory chip market shows early signs of recovering.
Samsung's revenue for the quarter is estimated to have fallen 13% to 67 trillion won. The company's mobile business is likely to have reported an operating profit of around 3 trillion won, similar to last year.
The company's chip business has been hit hard by a global economic slowdown and high interest rates, which have dampened demand for consumer goods. This led to a sharp decline in memory chip prices in the first two quarters of the year.
However, analysts say that losses in Samsung's memory chip business likely shrank in the third quarter as the company focused on more profitable, higher-end chips. Prices of some DRAM chips also began rebounding near the end of last quarter, and NAND Flash chip prices may start recovering as early as the current quarter.
Investors will be closely watching Samsung's detailed earnings release on October 31 for more information on the company's outlook for the chip industry.
What does this mean for consumers?
The early signs of recovery in the memory chip market are good news for consumers. It could mean that prices for smartphones, laptops, and other electronic devices could start to come down in the coming months.
However, it is important to note that the chip industry is still facing headwinds. The global economic slowdown is ongoing, and inflation remains high. This could continue to weigh on demand for consumer goods and chip prices.
Overall, the recovery in the chip market is a positive development, but it is still too early to say when consumers will see the full benefits.