South Korean company’s billions investment in its foundry business and increasing politicization of the chip sector will be tailwinds over the long run, WSJ reports
As Memory-chip maker Samsung is all in and ready for a life after the current bust in the semiconductor sector.
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Samsung Electronics is looking through the tough times: ambitious investments in its foundry business and the increasing politicization of the chip business will be tailwinds over the long run.
Market carnage has been especially obvious in the semiconductor sector, and Samsung is no exception. Its shares have lost around 40% of their value since early 2021, wiping out almost $300 billion of market value.
Weakening demand and high inventories of memory chips—the company’s key profit driver—make life particularly tough for Samsung right now. Industry tracker TrendForce expects prices for NAND flash, a type of memory chips used for storage, to fall 15% to 20% in the fourth quarter—after a 13% to 18% decline in the quarter before.
Samsung’s operating profit for both quarters is expected to fall more than 20% year-over-year, according to analysts’ estimates on S&P Global Market Intelligence.
*The company will announce earnings for the September quarter this month.