Samsung reported a smaller fall in quarterly profit than expected, which some experts believe could show signs of life in a struggling semiconductor market.
The South-Korean company saw its operating income fall to around $1.8bn with a 13% drop in sales. The 78% decline in operating income is an improvement over last quarter’s record 95% drop.
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The results come as the world’s second largest memory chip producer, and its rivals, continue to struggle with a dramatic market downturn.
However, Ben Barringer, equity research analyst at Quilter Cheviot, told Verdict that the results show “signs of life in what has been a difficult market.”
“Sales and revenues were down significantly on the year, but the picture is improving and suggests a trough has been reached,” Barringer said.
Samsung’s shares rose as much as 4.4% following its financial results, their most in over a month.
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By GlobalDataHowever, consultant analyst at research company GlobalData told Verdict that he believes the chip resurgence is still some way off.
Orme said the significant story over the next few years will be the extent Korea Inc, led by Samsung, can “become the go-to global chip hub by 2030”.
“In some ways Korea Inc is in pole position given its dominance of the global memory business, hence Washington’s recent compromise to allow Samsung and SK Hynix to build memory fab capacity in China using otherwise sanctioned US equipment technology, whence it makes 40% of its key memory chips upon which the US relies,” he added.
The news follows the company and Hynix being granted an exception from US export restrictions, meaning they can acquire anything they need to expand their chipmaking operations in China.
