Estimated analysts, Korean Samsung Electronics’ operating profit for the most recent quarter should decline 50-58% year-on-year to a six-year low, a range of $4.62 billion to $5.64 billion equivalent. The situation in the storage market will not contribute to a rapid recovery of the positive dynamics.
Analysts are prompted to make such forecasts by the negative dynamics of the prices of memory chips, the largest producer of which is a South Korean company. According to some estimates, the dynamics of the fall in memory prices in the current environment is similar in drama to the events of 2008, when the global financial market was gripped by a global crisis. Everything is made worse by an unfavorable combination of lower demand and overstocking of stocks, which has not been observed in the last decade.
According to experts, the release of flash memory brought Samsung only losses in the fourth quarter, and the production of DRAM, if it brings profits in the first half of this year, is very modest. Storage accounts for about half of Samsung’s operating income. Because of this, the manufacturer’s overall financial performance is very sensitive to the state of the memory market. Samsung will summarize preliminary results for the last quarter this Friday, and the full report will be released before the end of this month.
That’s what analysts expect Samsung will be able to overcome the low point of the crisis in the memory market in the second quarter of this year, and already in the second half of the year positive dynamics of individual indicators can be expected. According to TrendForce, RAM prices fell 40% and solid-state storage prices fell 14% over the past year. Operating income for Samsung’s entire semiconductor business is expected to fall 78% in its most recent quarter, and mobile devices will bring the company 14% less profit than a year earlier.