Downgrade in Earnings Projections for Samsung and SK Hynix in Q4

Seoul, Dec 22 (NationPress) Earnings projections for South Korea's two largest chipmakers, Samsung Electronics and SK Hynix, for the fourth quarter have been adjusted downward primarily due to a decline in industry demand, according to an industry survey released on Sunday.

As per the latest survey conducted by Yonhap Infomax, the financial arm of Yonhap News Agency, which surveyed 20 brokerage firms in Korea, Samsung Electronics' operating profit for the October-December timeframe is projected at 8.58 trillion won (US$5.92 billion).

While this new forecast is significantly higher than the 2.82 trillion won reported in the same quarter last year, it marks a decline of over 1 trillion won compared to the earlier estimate of 9.77 trillion won made in October and November.

Market analysts indicate that the ongoing downturn in demand for conventional IT products, such as smartphones and PCs, has led to continued weak profitability in Samsung's primary memory segment.

SK Hynix, which has a competitive edge in next-generation AI high-bandwidth memory (HBM), is anticipated to report its highest quarterly results for the fourth quarter.

According to the latest forecasts by Yonhap Infomax, SK Hynix's estimated operating profit for this period is 7.77 trillion won, reflecting a 10.59 percent increase from the previous quarter.

However, this figure represents a 4.16 percent decrease compared to the 8.11 trillion won consensus estimate issued in October and November.

Observers note that SK Hynix has managed to maintain its profitability through its high-value HBM products but has not been able to escape the effects of declining prices for general-purpose memory.

In a related development, the U.S. Commerce Department has granted Samsung Electronics up to $4.745 billion in direct funding to bolster the South Korean tech giant's chip manufacturing investments in central Texas, as it aims to enhance domestic semiconductor production.

This announcement follows a preliminary agreement with Samsung in April to provide up to $6.4 billion in grants under the CHIPS and Science Act.

Additionally, the department has made a final decision to provide up to $458 million in direct funding and up to $500 million in loans to another Korean company, SK Hynix, for its investment in Indiana.