Samsung Electronics Expected to Surpass 70 Trillion KRW in Revenue for the First Time in Q3 This Year

[Asia Economy Reporter Suyeon Woo] Samsung Electronics is expected to surpass 70 trillion KRW in quarterly sales for the first time in history in the third quarter of this year, driven by strong performance in the semiconductor and smartphone businesses.

According to FnGuide on the 25th, the consensus for Samsung Electronics' third-quarter earnings this year is projected at 73.1298 trillion KRW in sales and 15.6825 trillion KRW in operating profit. These figures represent increases of 9.2% and 26.9%, respectively, compared to the same period last year. If the consensus holds, Samsung Electronics' quarterly sales will exceed 70 trillion KRW for the first time in the third quarter.

With memory semiconductor prices continuing to rise through the third quarter, recovery in smartphone market sales, and a favorable exchange rate environment are expected to drive sales growth. Additionally, improvements in the non-memory semiconductor sectors such as system semiconductors and foundry are anticipated to support earnings.

In the second quarter, Samsung Electronics' semiconductor division recorded sales of 22.74 trillion KRW and an operating profit of 6.93 trillion KRW. Securities firms forecast that the semiconductor division alone will generate operating profits around 9.5 trillion KRW in the third quarter of this year.

Of course, the expected decline in DRAM prices starting in the fourth quarter could become a burden on Samsung Electronics' performance toward the end of the year. However, it is also anticipated that the decline in DRAM prices and the simultaneous price increase trend in foundry services will offset the drop in earnings.

TrendForce has predicted that DRAM prices, especially for PC and server DRAM, could fall by 3-8% quarter-on-quarter in the fourth quarter. Domestic securities firms have also suggested that Samsung Electronics' non-memory division operating profit could approach 1 trillion KRW after the fourth quarter.

Kim Kyung-min, a researcher at Hana Financial Investment, stated, "In the IT sector, the positive effects (due to exchange rates) and negative effects (due to smartphone shipment sluggishness caused by parts shortages) will offset each other. In semiconductors, profitability is expected to improve significantly due to cost reductions from yield improvements in advanced non-memory foundry processes."