Samsung expects a difficult second quarter – Siècle Digital

Samsung announced its guidance for second-quarter 2023 financial results on Friday, July 7. The South Korean company expects a sharp decline in operating profit, which will be heavily impacted by the drop in the price of its DRAM chips. , for dynamic random access memory and NAND for flash memory. The semiconductor giant will have to wait a bit before it can capitalize on the artificial intelligence (AI) craze.

Operating profit down 96%

For the last three months, Samsung expects sales of 42 billion euros. This is 22% less than in the same quarter of the previous year. In terms of operating profit, the Seoul-based company expects around 420 million euros. That’s down 96% year-to-date, the lowest in fourteen years. However, it’s still ahead of analysts’ estimates of a profit of around 390 million euros.

This drastic drop is attributed to the drop in memory chip prices. According to Bernstein Research, prices for DRAM and NAND semiconductors fell by 21% and 13% between April and June, respectively. With the return to normal consumption habits after the Covid-19 pandemic, the latter, used to design computers and smartphones, are less in demand. Weaker demand was felt in the sale of Samsung, the world market leader for memory chips.

However, the juggernaut is hoping to bounce back in the coming months. Asked by the Financial TimesKim Dong-won, analyst at KB Securities pointed out: “ Samsung’s DRAM shipments are beating previous estimates and chip inventory is running out fast, so we expect the cost structure to improve soon ».

Samsung can also count on the booming artificial intelligence market. Large language models like ChatGPT require many state-of-the-art semiconductors to train efficiently and as quickly as possible. In this sense, Kyung Kye-hyun, head of Samsung’s memory chips business, pointed out during an internal seminar that ” Our HBM3 and HBM3P chips will make a significant contribution to increasing our profits in the next year Samsung’s second quarter 2023 financial results will be released on July 27.