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Samsung Electronics flags smaller-than-expected quarterly profit fall as chip market bottoms out

  • Samsung Electronics’ operating profit in the fourth quarter likely fell 34 per cent to 7.1 trillion won, from 10.8 trillion won a year earlier, it says
  • Analysts previously forecast that the memory chip maker’s operating profits would fall to 6.5 trillion won in the quarter

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Samsung Electronics is the world’s biggest memory chip maker. File photo: Bloomberg

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

The world’s biggest memory chip maker has struggled since late 2018 as a weak global economy curbed spending by data centre customers and rising inventories 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 US-China trade war is lifting optimism that demand from server and 5G smartphone customers will return this year.

Operating profit in the quarter ended December 31 likely fell 34 per cent to 7.1 trillion won (US$6.09 billion) from 10.8 trillion won a year earlier, Samsung said. That came in ahead of the 6.5 trillion won forecast from Refinitiv SmartEstimate.

Fourth-quarter revenue fell 0.5 per cent to 59 trillion won.

Annual profit declined 53 per cent to 27.7 trillion won, its lowest since 2015 and the steepest annual profit percentage drop in a decade.

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