Samsung set for smallest profit drop in 6 quarters on chip rebound

Samsung Electronics is expected to report its smallest profit drop in six quarters, analysts estimate, as a rebound in semiconductor prices shrinks losses in the South Korean conglomerate's mainstay chip division.

The world’s biggest maker of memory chips, smartphones and televisions is expected to show a 14 per cent fall in fourth-quarter profit when it announces preliminary earnings on Tuesday.

Operating profit likely fell to 3.7 trillion won (US$2.82 billion) in the October-December quarter, according to the average of an LSEG SmartEstimate from 30 analysts, weighted toward those who are more consistently accurate.

That would compare with an operating profit of 4.31 trillion won in the December quarter of the previous year. Samsung last reported a year-on-year quarterly profit increase for the second quarter of 2022.

A solid set of results would justify Samsung’s sharp stock market run-up in the fourth quarter, which has made it Asia’s second-most valuable listed company after chip foundry rival Taiwan Semiconductor Manufacturing Co, with a market capitalisation of about US$390 billion.

Samsung’s chip division – traditionally its biggest earner – likely reduced its quarterly loss to around 1.2 trillion won, according to an average of eight forecasts. Analysts said its dynamic random access memory (DRAM) chips business returned to a profit.