"It's more like a relief of the fears before the results, as investors have oversold tech stocks," Dale Gai, research director at Counterpoint Research, told CNBC via email.Samsung did not release a breakdown of results for each business segment. That will come later this month. But its component business accounts for nearly 60% of total operating profit and consists of chips that go into products ranging from servers in data centers to smartphones and laptops.
Sanjeev Rana, analyst at CLSA, told CNBC he expects profit at Samsung's semiconductor business to have risen 19% quarter on quarter. Rana said that a better product mix among Samsung's so-called memory chips, plus a stronger U.S. dollar, likely helped the technology giant. Samsung's chip sales are mainly in U.S. dollars but it reports the profit in Korean won.
Daiwa's Kim said that memory chips likely saw a decline in shipments, but the company's design and foundry business probably saw"double-digit operating profit margin" in the second quarter, which helped boost the chip division. A foundry is a chipmaking service through which a company may design and manufacture semiconductors for another firm. TSMC is the world's largest foundry.
Meanwhile,"chip inventory is reaching a very high level," according to Counterpoint Research's Dai. High inventory levels of semiconductors suggest demand is weakening, which could also increase supply and put pressure on prices." lot of the bad news is also in the price and for stocks like Samsung and Hynix the investors seem to be betting that the two companies might also announce memory production or capex cuts just a Micron announced last week," Rana said.
Given these factors, Rana said, Samsung's strategy of building up its inventory of certain chips"is right," adding that the market may be underestimating the challenges Samsung will face on memory chip production in 2023.
Ireland Ireland Latest News, Ireland Ireland Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: FXStreetNews - 🏆 14. / 72 Read more »