Samsung Electronics Co has predicted that the long-depressed memorychip market is heading for recovery, after reporting profit for the third quarter well ahead of analysts’ estimates.
The South Korean giant’s net income totaled 5.5 trillion won (US$4.1 billion) in the third quarter, more than double expectations of 2.52 trillion won, data compiled by Bloomberg showed.
A significant chunk of the profit, 1.9 trillion won, came from a one-time income tax gain.
Photo: AFP
Samsung’s chip division posted a 3.75 trillion won operating loss, narrower than the 4.4 trillion won loss a quarter earlier.
On a conference call, Samsung executives said that artificial intelligence (AI) is driving demand in the technology industry and memorychip inventories are declining after peaking in May.
“It’s very encouraging to see that chip inventory is coming down,” said Park Sang-hyun, an analyst who publishes on the SmartKarma platform. “However, we still need more evidence that ... memory demand is set to recover next year.”
South Korea’s largest company said it plans to trim capital expenditure for the semiconductor division to 47.5 trillion won this year, from 47.9 trillion won last year. Overall, its capital spending for this year is expected to reach a record 53.7 trillion won, compared with 53.1 trillion won last year.
The company’s display division more than doubled operating profit to 1.94 trillion won from the previous quarter.
Samsung said the increase was due to the release of flagship models from major customers, without identifying them.
Samsung’s division that includes its mobile business posted an operating profit of 3.73 trillion won, aided by new Galaxy Z foldable smartphones launched in the second half of this year.
Samsung mobile division vice president Daniel Araujo said that foldables would be “a key engine” for short-term growth.
“We’re open to the possibility of expanding the foldable category from only smartphones into other product groups like laptops and tablets,” Araujo said.
Samsung voiced optimism for the memorychip market overall.
It predicted that prices would rise this quarter compared with the third quarter.
Overall demand for such components would rise with the development of AI applications, such as OpenAI’s ChatGPT, it said.
Samsung executives said they would continue to invest in high-density memory chips, particularly in high-bandwidth memory (HBM), with plans to increase capacity by 2.5 times next year.
HBM is a type of advanced memory chip that stacks DRAM to process data more quickly. It works in tandem with AI hardware such as Nvidia Corp’s graphics accelerators, which speed up data processing for intensive tasks such as training AI models.
“We have already completed supply talks for next year with our key customers for this volume,” Samsung memory division executive vice president Min Jae-june said on the conference call. “We expect the recovery trend in the memory market to accelerate.”
Nvidia Corp CEO Jensen Huang (黃仁勳) is expected to miss the inauguration of US president-elect Donald Trump on Monday, bucking a trend among high-profile US technology leaders. Huang is visiting East Asia this week, as he typically does around the time of the Lunar New Year, a person familiar with the situation said. He has never previously attended a US presidential inauguration, said the person, who asked not to be identified, because the plans have not been announced. That makes Nvidia an exception among the most valuable technology companies, most of which are sending cofounders or CEOs to the event. That includes
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
RSS