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Samsung’s Semiconductor Unit Narrows Loss as Memory Chip Prices Rebound

Summary: In Q3, Samsung's semiconductor business narrowed its operating loss by over $445 million due to rising memory chip prices driven by production cuts. The company's mobile and network unit, boosted by strong foldable handset sales, offset most of the semiconductor division's loss. Samsung's display business also recorded solid profits. Overall, the company reported a 77.6% drop in operating profit YoY, but a significant jump QoQ. Analysts anticipate a stronger performance in the fourth quarter, driven by continued production cuts and higher sales of advanced memory chips
South Korea
s 005930.KO Blue Chip 150 Tech 350 Semicon 75
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Samsung Electronics saw an improvement in its semiconductor business in the third quarter as memory chip prices rebounded, leading to a narrower operating loss of more than 600 billion won ($445 million).

This followed production cuts by chip manufacturers. While the semiconductor unit reported an operating loss for the quarter, it was an improvement from the previous quarter. Samsung’s mobile and network unit, buoyed by robust sales of foldable handsets, contributed significantly to offsetting the loss in the semiconductor division. The company’s display business also performed well, driven by demand for its organic light-emitting diode screens for premium smartphones. Overall, Samsung reported a 2.4 billion won operating profit, down 77.6% from the previous year, with revenue falling 12.2%. However, compared to the previous quarter, the operating profit surged 264%, with revenue rising 12.3%.

Analysts are optimistic about Samsung’s performance in the fourth quarter, anticipating a decline in memory chip inventory and continuous price rebound due to further production cuts. They also expect Samsung’s recovery to accelerate, attributed to the company’s higher share of advanced high-bandwidth memory chips and the impact of production cuts.

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