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 Pictures
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 is able to be the corporate’s lowest quarterly revenue because the 590 billion gained recorded within the first quarter of 2009, in keeping with the corporate’s previous earnings knowledge.
The second-quarter revenue forecast is essentially according to 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 corporate 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
Govt director, Daiwa Capital Markets
Through the pandemic-led growth, smartphone and PC producers stockpiled reminiscence chips as demand for shopper gadgets elevated. However these corporations at the moment are grappling with extra chip inventories as customers purchase fewer electronics on account of rising inflation. Consequently, costs for reminiscence chips have fallen.
“Demand remained weak. However now the hot button is the provision [of memory chips]. Samsung Electronics introduced the significant manufacturing minimize in early April so we anticipate [that] in third quarter,” SK Kim, government director of Daiwa Securities Capital Markets, instructed CNBC’s “Squawk Field Asia” on Friday.
In April, Samsung mentioned it might be making a “significant” minimize in reminiscence chip manufacturing, following the lead of smaller rivals akin to SK Hynix and Micron.
“With that, we assume that the costs can rebound the tip of this 12 months or early subsequent 12 months,” mentioned Kim.
![Samsung's memory chip prices to rebound end-2023 or early 2024, says analyst](https://image.cnbcfm.com/api/v1/image/107267942-16886962181688696215-30194770536-1080pnbcnews.jpg?v=1688699102&w=750&h=422&vtcrop=y)
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.
“However on the identical time, there’s additionally the weak demand from China due to the uncertainty in manufacturing,” mentioned Kim.
The U.S. granted Samsung and SK Hynix one-year waivers to proceed importing superior instruments for his or her China vegetation. These exemptions have been set to run out in October, however the Wall Road Journal reported a U.S. official mentioned they “could be renewed for the foreseeable future.”
Within the first 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.