Samsung expects Q2 operating profit to plunge 96% as chip oversupply persists
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Samsung Electronics (OTCPK:SSNLF) expects second-quarter operating profit to plunge about 96% Y/Y to 60 billion won (~$46 million), as the memory chip downturn continues amid persisting oversupply, sending its Korean-listed shares 2.4% lower.
The world's largest memory chip maker expects its quarterly sales to drop 22.3% Y/Y to 60 trillion won ($45.94 billion), a preliminary earnings statement showed.
The downbeat outlook comes despite Samsung (OTCPK:SSNLF) cutting its memory chip production amid a global slowdown in demand that drove prices lower.
The production cut will likely take place in the third quarter, which could prop up prices, according to SK Kim, analyst at Daiwa Capital Markets.
The global semiconductor market size is expected to shrink this year amid high inflation and weakening demand. However, the industry is forecast to recover in 2024, with a major rebound expected in the memory segment.
Samsung (OTCPK:SSNLF) will report its second-quarter earnings on July 27. The South Korean company competes with Taiwan Semiconductor (TSM) and GlobalFoundries (GFS) in the industry and builds chips for Qualcomm (QCOM), IBM (IBM) and Apple (AAPL), among others.
More on the memory chip downturn:

Samsung Electronics to cut memory chip output by 'meaningful' level
Semiconductor industry may dip in 2023, but rebound expected in 2024
Early Signals Point To A Memory Chip Recovery In Late 2H
Samsung Electronics: Coming Out Of The Memory-Driven Doldrums