Seoul, Dec 22 (IANS) Earnings forecasts for South Korea’s two largest chipmakers, Samsung Electronics and SK hynix, for the fourth quarter have been revised down largely due to a downturn in industry demand, an industry survey showed on Sunday.
According to the latest survey conducted by Yonhap Infomax, the financial arm of Yonhap News Agency, which polled 20 Korean brokerage houses, Samsung Electronics’ operating profit for the October-December period is estimated at 8.58 trillion won (US$5.92 billion).
While the latest forecast is sharply higher than the 2.82 trillion won recorded in the fourth quarter of last year, it represents a drop of over 1 trillion won compared with the previous estimate of 9.77 trillion won made in October and November.
Market observers say the deepening slump in demand for traditional IT products, including smartphones and PCs, has contributed to prolonged weak profitability in Samsung’s core memory business.
SK hynix, with its strength in next-generation AI high-bandwidth memory (HBM), is expected to post its highest on-quarter results for the fourth quarter.
According to the latest Yonhap Infomax forecasts, SK hynix’s estimated operating profit for the cited period is 7.77 trillion won, a 10.59 percent increase compared with the previous quarter.
However, the estimate is a 4.16 per cent drop compared with the 8.11 trillion-won consensus estimate made in October and November.
The observers say SK hynix has been defending its profitability with its high-value HBM products but has failed to avoid the impact of falling prices of general purpose memory.
Meanwhile, the US Commerce Department has awarded Samsung Electronics up to $4.745 billion in direct funding to support the South Korean tech giant’s chipmaking investment in central Texas, as it strives to strengthen domestic semiconductor production.
The announcement came after the department announced a preliminary deal with Samsung in April to provide up to $6.4 billion in grants under the CHIPS and Science Act.
It also announced a final decision to give up to $458 million in direct funding and up to $500 million in loans to another Korean firm, SK hynix, for its investment in Indiana.
–IANS
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