Despite a New Quarterly Sales Record

Samsung Electronics' stock price hit a 52-week low despite a new quarterly sales record.

Samsung Electronics set a new quarterly sales record again. However, the stock price of the company hit a 52-week low. According to experts, memory chip market conditions need to improve along with the company’s foundry competitiveness for the stock price to rebound.

The price closed at 68,000 won per share on April 7, down 0.73 percent from the previous session. It fell 12.52 percent from the beginning of this year to April 6, when KOSPI fell 8.15 percent.

On the other hand, the business performances of the company are better than ever. In the first quarter of this year, its sales increased 17.8 percent year on year to 77 trillion won and operating profit jumped 50.3 percent to 14.1 trillion won. According to experts, this positive earnings surprise is because South Korea’s semiconductor exports hit an all-time high last month and the won remains weak.
 

This is not the first time that its stock price fell after a positive earnings announcement. In general, the price reflects future memory chip market conditions with an interval of six months. In other words, the immediately preceding quarterly performance has a low correlation with the current stock price. In addition, the Philadelphia Semiconductor Index fell 2.32 percent the previous day.

As mentioned above, the market conditions are yet to improve. The Chinese demand for smartphones is dropping fast this year, which may lead to memory chip oversupply. Besides, the lockdown of Chinese cities, the war in Ukraine and inflation are poised to reduce the global smartphone and PC demands.

The company’s foundry competitiveness is being increasingly doubted at the same time. According to industry sources, Samsung Electronics is half of TSMC in terms of yields in 5 nm and more advanced processes. Recently, Nvidia opted to partner with TSMC in manufacturing its next-generation GPU H100.

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