HomeBusinessSamsung Electronics Q3 Operating...

Samsung Electronics Q3 Operating Profit Exceeds Expectations, Signals Memory Chip Recovery

Free Subscribtion

Samsung Electronics, the world’s largest dynamic random-access memory (DRAM) chip maker, reported better-than-expected third-quarter operating profit results, indicating a potential recovery in the memory chip market. Despite a 77.6% decline in operating profit compared to the previous year, the company experienced a significant jump of 262.6% from the second quarter. This positive development suggests that the memory chip glut may be reaching its bottom.

Strong Q3 Performance

Samsung Electronics announced a third-quarter operating profit of 2.43 trillion Korean won, surpassing analyst estimates of 2.3 trillion Korean won. Although the company’s revenue for the quarter fell 12.2% from the previous year, the significant improvement in operating profit from the previous quarter is a promising sign for the industry.

During its earnings call, Samsung acknowledged the uncertainties that persist in the market, including geopolitical risks and ongoing customer inventory adjustments. However, the company expressed optimism about gradually stabilizing and improving demand, supported by recovering consumer sentiment, easing inflation, and major customers introducing new products, particularly in the PC and mobile segments.

Memory Chip Demand Outlook

Samsung anticipates a pickup in memory chip demand in the fourth quarter driven by year-end promotions, new product launches from major customers, and strong demand for generative artificial intelligence (AI). Large language models like ChatGPT require high-performance memory chips to generate human-like responses by remembering details from past conversations and user preferences.

The company highlighted that it has received numerous purchase inquiries as the industry reaches a bottom following production cuts. Samsung is expanding sales of advanced-node products, such as double data rate 5 synchronous dynamic random-access memory (DDR5) and flash storage for the 5G era (UFS4.0), to meet the demand for high-performance chips.

Market Recovery and Growth Potential

While global smartphone sell-through volumes declined by 8% year-on-year in the third quarter of 2023, signaling a slower-than-expected recovery in consumer demand, the market experienced a 2% quarter-over-quarter growth due to a positive performance in September. This growth indicates a potential market recovery on the horizon.

- Advertisement -

Analysts expect Samsung’s earnings to rebound in the fourth quarter, driven by further product mix improvement, expanding sales of high-bandwidth memory 3 (HBM3), and a memory price hike. The company’s ability to supply high-performance DRAM chips and HBM3 to U.S.-based chip designer Nvidia positions it to take advantage of the booming demand for AI chips.

Samsung’s Strategic Moves

To address the growing demand for generative AI, Samsung plans to increase its sales of HBM3 and HBM3E, leveraging its position as the industry’s largest production capacity. The company aims to supply HBM3 to Nvidia starting from the fourth quarter of 2023 and expand its supply in 2024. Additionally, Samsung Electronics is expected to supply HBM3P, targeting next-generation AI graphics processing units (GPUs) from mid-2024.

With an intact view of meaningful profit recovery in the coming quarters, Samsung anticipates positive trends driven by larger industry-wide production cuts, improving demand, and a shift towards high-average selling price products like DDR5.

Conclusion

Samsung Electronics’ better-than-expected third-quarter operating profit results indicate a potential recovery in the memory chip market. Despite a year-on-year decline, the substantial improvement from the previous quarter suggests that the industry may be reaching its bottom. With increasing demand for generative AI and the company’s strategic moves to expand sales of advanced-node products, Samsung is well-positioned to capitalize on the growing opportunities in the market.

As uncertainties persist, Samsung remains cautiously optimistic about the market’s recovery, driven by factors such as geopolitical risks, demand rebound, and ongoing customer inventory adjustments. With its strong presence in the memory chip industry and commitment to innovation, Samsung Electronics continues to play a significant role in shaping the future of the semiconductor market.

― ADVERTISEMENT ―

― YouTube Channel for Dog Owners ―

spot_img

Most Popular

Magazine for Dog Owners

Popular News

Lost City: The Enigmatic Underwater Wonder

This article is a comprehensive exploration of the Lost City Hydrothermal...

Wonka 2023: A Prequel to the Classic Willy Wonka Movies on December

The enchanting world of Willy Wonka has captivated audiences for decades,...

The New Apple Pencil: An Affordable and Versatile Tool for iPad Users

As technology continues to evolve, Apple remains at the forefront of...

― ADVERTISEMENT ―

Read Now

Watch out for Coca-Cola Spiced: The Bold New Flavor Taking on Dr Pepper

Coca-Cola, the iconic soda brand, is about to shake things up with its latest creation - Coca-Cola Spiced. This new permanent flavor is set to rival the beloved Dr Pepper, offering a unique blend of refreshing notes from raspberry and spiced flavors. In this article, we'll explore...

Dubai’s Unprecedented Flooding: What You Need to Know

Dubai, known for its arid climate and scarce rainfall, experienced an extraordinary event in April 2024. Torrential downpours caused widespread flooding, disrupting daily life and raising questions about the causes and implications of such extreme weather. In this article, we will delve into the factors behind Dubai's...

EU Renews Sanctions Against Russia: A Unified Stance

The European Union (EU) has once again demonstrated its commitment to maintaining a unified front against Russia by renewing sanctions in response to the ongoing conflict in Ukraine. This decision, made during a recent meeting of EU foreign ministers, underscores the bloc's determination to hold Moscow accountable...

Artificial Intelligence in 2024: What to Expect

Artificial intelligence (AI) has been making significant strides in recent years, and many experts believe that 2024 will be a pivotal year for this transformative technology. As we look ahead, it's important to consider the trends and developments that will shape the AI landscape in the coming...

The Best Celebrity Halloween Costumes of 2023: A Spooky Showcase

Halloween is a time for creativity and self-expression, and no one knows how to make a statement quite like celebrities. Every year, Hollywood's biggest stars go all out to create the most jaw-dropping and unforgettable Halloween costumes. From iconic movie characters to pop culture references, these celebrities...

Is Google Paying Billions to Samsung for Default Apps on Android Phones?

In recent news, it has been revealed that Google has made a significant investment of $8 billion over four years to secure its position as the default search engine, voice assistant, and app store on Samsung's mobile devices. The details of this deal emerged during the ongoing...

Unlocking the Power of Early Peanut Exposure: Safeguarding Your Child’s Future Against Allergies

As a middle-aged dad, you want nothing more than to ensure the health and well-being of your little ones. One common concern that often weighs heavily on the minds of modern parents is the ever-increasing prevalence of food allergies, particularly the dreaded peanut allergy. However, a groundbreaking...

The Hidden Dangers of Nanoplastics in Bottled Water

Bottled water has long been a popular choice for those seeking a convenient and seemingly safe source of hydration. However, recent studies have shed light on a disturbing truth: bottled water is not as pure as we once believed. In fact, it has been found to contain...

The Fall of the House of Usher: A Haunting Tale of Mystery and Horror

The Mike Flanagan universe continues to expand, and his upcoming series, The Fall of the House of Usher, is set to captivate audiences with its fresh, freaky twist on Edgar Allan Poe's classic tale. This limited series promises to be a thrilling blend of mystery, horror, and...

A Game-Changing Breakthrough in Alzheimer’s Detection: The Power of Wearable Headbands

Alzheimer's disease, a progressive neurodegenerative disorder, remains a significant challenge in healthcare. Detecting the early signs of Alzheimer's is crucial for developing preventative strategies and interventions. Excitingly, recent research has unveiled a groundbreaking method to identify the earliest stages of Alzheimer's disease through the use of wearable...

The Iron Claw: A Gripping Tale of Triumph and Tragedy in the Wrestling World

The world of professional wrestling has always captivated audiences with its larger-than-life characters and thrilling storylines. One such story that has captured the imagination of fans for decades is that of the Von Erich wrestling family. Now, their gripping tale is set to come to life in...

GM and Honda Join Forces to Bring Robotaxis to Japan by 2026

In a groundbreaking collaboration, General Motors (GM) and Honda have partnered with Cruise, a leader in autonomous vehicle technology, to introduce a cutting-edge robotaxi service in Tokyo by 2026. This joint venture aims to revolutionize transportation in Japan's bustling capital by offering a safe and accessible autonomous...

Global News

Install
×