SEOUL, Jan. 23 (Korea Bizwire) — South Korean chip giants Samsung Electronics Co. and SK hynix Inc. are expected to see their operating profit drop sharply in the first quarter on sluggish demand following a bumper year, industry sources said Wednesday.
Bolstered by a “superboom” in the global semiconductor market, Samsung and SK hynix posted record performances, spearheading South Korea’s export growth.
According to analysts, the two chip giants probably registered combined sales of 125 trillion won (US$111 billion) last year, with their operating profit totaling around 65 trillion won.
Samsung and SK hynix posted a record combined top line of 104 trillion won in 2017 with their total operating profit also reaching a fresh high of 48.9 trillion won.
But the two companies are estimated to have suffered sharp drops in shipments and operating profit due to slacking demand.
SK hynix is scheduled to announce its fourth-quarter records on Thursday, while Samsung is slated to report final records for the October-December period on Jan. 31.
Market watchers painted a gloomy outlook for the January-March period, saying Samsung and SK hynix may suffer sharp declines in sales and operating profit due to weak demand for memory chips and price falls.
Samsung is widely expected to chalk up an operating profit of 6 trillion won on sales of 16 trillion won in the first quarter, with comparable figures coming to 3 trillion won and 8 trillion won for SK hynix.
Their operating profit forecasts are about half their operating income recorded during the same period a year earlier.
Industry sources, however, said the chip sector will likely bounce back after bottoming out during the first quarter or the second quarter.