Samsung Share Price: Shares of Samsung Electronics Co. fell around 6 per cent on the South Korean KOSPI on Tuesday, July 7, even after the company projected a sharp rise in its second-quarter earnings.
As of 6:05 am IST, Samsung’s stock was down nearly 6 per cent, falling 19,500 won to 299,500 won.
Record quarterly profit driven by memory chip business
The world’s largest memory chipmaker estimated its April-June operating profit at 89.4 trillion won (USD 58.44 billion), compared with 4.7 trillion won in the same period last year.
The projected earnings mark Samsung’s highest-ever quarterly operating profit and its third straight quarter of record-breaking profits, reflecting strong demand and higher prices for memory chips.
Analysts cite strong memory prices
“Samsung posted better-than-expected earnings despite bonus-related provisions, as memory prices rose sharply,” Lee Min-hee, an analyst at BNK Investment & Securities, told Reuters.
According to analysts, the company’s memory chip division is expected to remain the biggest contributor to earnings, supported by elevated chip prices.
Foundry and logic chip businesses may remain under pressure
Despite the strong performance in its memory business, analysts expect Samsung’s foundry and logic chip (LSI) divisions to report wider losses. The decline is largely attributed to higher bonus-related expenses, which have been allocated across the semiconductor business.
The company had agreed to a significant bonus payout for employees in its chip division in May, increasing costs for the quarter.
Full earnings due on July 30
Samsung is scheduled to release its detailed second-quarter earnings report on July 30, when investors will get a clearer picture of the performance across its various business segments.
Risk ahead of Samsung
The report by Reuters further stated that analysts said the biggest risk to the memory boom would be a slowdown in AI infrastructure investment. Delays in US data centre construction caused by labour shortages, power constraints or local opposition could eventually weaken demand across the AI hardware supply chain.
In the background, the chip company last week announced plans to invest 2,100 trillion won in South Korea through 2040, but said spending would be adjusted according to market conditions and business needs, Reuters said.
