Samsung flags smaller-than-expected fall in Q4 profit as chip price fall eases

File photo.

File photo.   | Photo Credit: Reuters


The world's top memory chip maker has struggled since late 2018

Samsung Electronics flagged a smaller-than-expected fall in quarterly operating profit, indicating that memory chip prices bottomed out quicker than analysts had anticipated, strengthening hopes of a recovery.

The world's top memory chip maker has struggled since late 2018 as a weak global economy curbed spending by data centre customers and rising inventory of memory chips squeezed prices, ending a two-year industry boom.

But hopes for a rebound in chip prices are gaining momentum, and an expected easing in the U.S.-China trade war is lifting optimism that demand from servers and 5G smartphones customers will return this year.

Operating profit in the quarter ended Dec. 31 fell 34% to 7.1 trillion won ($6.09 billion) from 10.8 trillion won a year earlier. That came in ahead of the 6.5 trillion won forecast by Refinitiv SmartEstimate.

Samsung's annual profit declined 53% to 27.7 trillion won, its lowest since 2015 and the biggest annual profit percentage drop in a decade.

Fourth-quarter revenue fell 0.5% to 59 trillion won.

Chip-price tracker DRAMeXchange said spot prices of DRAM chips — which provide devices with temporary workspace and allow them to multi-task — started to rebound in late 2019, and expected DRAM prices to stop falling in the first quarter.

Samsung Electronics is scheduled to disclose detailed results later this month.

($1 = 1,166.4600 won)

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Printable version | Jan 28, 2020 12:27:43 PM |

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