Strait of Hormuz LNG Crisis Triggers Global Energy Market Shock 
Ecuador Raises Tariffs on Colombian Imports to 50% Amid Border Security Dispute 
Japan Nominates Reflationist Economists to BOJ Board, Signaling Policy Shift 
China’s New Home Prices Post Sharpest Drop Since 2022 Amid Ongoing Property Slump 
U.S. Stocks Close Lower as Hot PPI Data, Nvidia Slide Weigh on Wall Street 
IMF Urges U.S. to Cut Fiscal Deficit to Reduce Trade and Current Account Gaps 
Bank of Korea Holds Interest Rate at 2.50% as Growth Outlook Improves Amid AI Chip Boom 
Gold Prices Steady in Asia, Set for Strong February Gains on Safe-Haven Demand 
Asian Stocks Rise on Nvidia Earnings Boost; Yen Weakens as BOJ Rate Outlook Clouds 
Dominican Republic Unveils Massive Rare Earth Deposits to Boost High-Tech and Energy Sectors 
USITC to Review Impact of Revoking China’s PNTR Status, Potentially Raising Tariffs on Chinese Imports 
U.S.-Canada Trade Talks Resume as Trump Administration Reviews USMCA 
U.S. Stock Futures Fall as Nvidia Drops Despite Strong Earnings; Netflix Jumps 9% 
Strait of Hormuz Oil and LNG Shipments Disrupted After U.S.-Israel Strikes on Iran 
PBOC Scraps FX Risk Reserves to Curb Rapid Yuan Appreciation 
Samsung Electronics is projected to report a four-fold increase in Q3 operating profit due to recovering chip demand. However, the company’s slow move into the booming AI chip market may impact its future growth trajectory.
Q3 2024 Profit Surge Amid Chip Demand Recovery
Analysts estimate Samsung's operating profit at around 10.33 trillion won ($7.67 billion) for Q3, significantly higher than 2.43 trillion won a year earlier. However, this is relatively unchanged from 10.44 trillion won in the previous quarter, indicating a slowing recovery pace. The global semiconductor market has improved, primarily driven by demand for AI server chips, yet demand for traditional chips used in smartphones and PCs is softening.
Lagging in the AI Chip Market & Competitive Pressure
Samsung faces challenges catching up to competitors like SK Hynix and Micron in the high-margin AI chip sector, supplying major players like Nvidia. Additionally, Samsung is competing against growing Chinese semiconductor companies for commodity chip production. Analysts predict the company’s chip division will swing to a profit of 5.5 trillion won year-on-year but will see a 15% drop from the previous quarter, partly due to bonus provisions.
Geopolitical Risks & Market Shifts
Samsung's slower response to the AI chip market and its dependence on traditional mobile chips and China make it susceptible to geopolitical risks. Analyst Daniel Kim of Macquarie Equity Research noted that a potential commodity DRAM supply glut may impact Samsung more severely than its rivals like SK Hynix.
Mobile Business & Share Performance
Sales of Samsung's premium foldable phones have underperformed, contributing to a 2.6 trillion won operating profit in its mobile and network division—a 20% decrease from last year. Meanwhile, Samsung shares have declined by 23% this year, trailing SK Hynix’s 23% gain.
Upcoming Earnings Announcement
Samsung Electronics is set to release its preliminary Q3 results on Tuesday, with full financial details to be reported later in the month.
($1 = 1,336.39 won)
