South Korea Inflation Rises to 3.1% in August 
Australia GDP Beats Forecast, Boosting RBA Rate Hike Bets 
RBNZ Raises Interest Rate to 2.75%, Kiwi Dollar Slides 
Asian Currencies Mixed as Yen Nears 160, Oil Surges 
Asian Currencies Weaken as Dollar Rises, Kiwi Slides After RBNZ Hike 
Brazil, US Resume Tariff Talks as Trade Tensions Persist 
German Retail Sales Drop 3.4% in July 
Dollar Holds Near Two-Week High as Fed Rate Hike Bets Rise 
China Manufacturing PMI Contracts Again as Recovery Remains Fragile 
Gold Prices Steady as U.S.-Iran Tensions Lift Inflation Risks 
Ukraine Sanctions Chief Heads to Washington to Push Russia Bill 
Asian Stocks Slip as Fed Rate Hike Bets and Oil Surge Weigh 
Oil Prices Rise as U.S.-Iran Fighting Fuels Supply Fears 
Australia Current Account Deficit Widens to A$27.2 Billion 
Bessent Urges Japan on Fiscal Discipline, BOJ Rate Hikes 
US Tech Giants’ AI Bond Boom Raises Euro Zone Borrowing Risks 
Treasury Yields Set to Stay High as Debt Supply Pressures Bond Market 
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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)
