Samsung Electronics Reports Quarterly Earnings Plunge

Samsung Electronics has recently announced another decline in quarterly earnings, however, the drop was not as severe as in previous quarters. This could potentially be a positive sign for American companies Micron Technology and Intel.

September Quarter Operating Profit

According to Samsung, their operating profit for the September quarter amounted to 2.4 trillion won ($1.79 billion), a decrease of 78% compared to the same period last year.

Slowdown in Semiconductor Business

Samsung, the Korean technology giant, is still facing challenges in its semiconductor business. Nevertheless, the results for this quarter were an improvement from the previous quarter's 95% profit decrease. As a result, Samsung shares experienced a 2.7% increase in local trading.

Analysts' Perspective

Analyst Richard Windsor from Radio Free Mobile wrote that Samsung's preliminary results were better than expected, indicating that the inventory correction may be coming to an end. This potential stabilization could have a positive impact on revenue for consumer electronics.

Implications for Micron and Intel

If Samsung is on the upswing, it can be seen as a good sign for Micron and Intel.

Micron's Focus on Memory Chips

Micron's performance heavily relies on memory chips. As Samsung is the leading player in this market, the hope for a turnaround largely depends on improved pricing for these chips. With Samsung's recent figures suggesting signs of recovery, the inventory glut caused by the slowdown in PC and smartphone sales may be easing. Analysts at Stifel predict that Micron will benefit from Samsung's price increases on NAND memory chips and have taken a short-term Overweight position on Micron's stock.

Intel's Hopes for Broad-Based Recovery

Intel is anticipating a broader recovery in demand for chips in PCs and smartphones based on Samsung's results. Additionally, there may be positive implications for Intel's contract chipmaking business, where the company aims to compete with Samsung and Taiwan Semiconductor Manufacturing (TSM). Taiwan Semi's sales report from last week also exceeded analysts' expectations.

Conclusion

Samsung's recent quarterly earnings report, while still reflecting a decline, suggests some signs of improvement. This development carries potential implications for Micron and Intel, offering hope for a recovery in the semiconductor industry.