This week, leading semiconductor manufacturer Samsung Electronics is reporting the preliminary results of the past quarter. Though the data shows a 14% drop in profits, which equates to the smallest decline over the last six quarters, investors are considering it as a key indicator of the semiconductor market’s health due to Samsung’s dominant role in the industry.
Even this decline in profits is seen as positive by market participants and investors, as it implies a slowdown in the decrease in profits, marking the smallest decline in one and a half years. As per consensus data from 30 analysts, Samsung’s operational profits for the previous quarter likely fell by 35% to $2.82 billion year-on-year. The company last recorded annual profit growth in the second quarter of 2022.
Samsung’s semiconductor business would have curtailed its operational losses to about $912 million in the past quarter, a more than three-fold reduction compared to the second and third quarters of the previous year. The prices of DRAM and NAND memory types began to rise in the fourth quarter, contributing significantly to the improvement in Samsung’s financial performance. TrendForce estimates that in the mobile segment, DRAM prices went up by 18–23% in the last quarter, and NAND memory prices could have increased by 10–15%. Samsung has consistently cut memory production volumes from the first half of the year to stimulate price increases. Last quarter, it also sold off inventory more actively compared to competitors. Experts anticipate that Samsung’s DRAM segment should have reached a break-even