By Kwanwoo Jun
Samsung Electronics Co. shares fell sharply early on Tuesday as global semiconductor stocks were dragged lower by new US restrictions on advanced-tech exports to China.
Shares in the South Korean tech giant lost as much as 3.9% to 54,000 won ($37.78) before coming off their lows. They were last down 3.0% at KRW54,500, underperforming the benchmark Kospi’s 2.3% decline.
The South Korean chip juggernaut tracked a selloff in US tech stocks overnight after the Biden administration Friday imposed fresh curbs on exports of advanced semiconductors and chip-manufacturing equipment to China. Korean markets were closed Monday for a public holiday.
Samsung Electronics’ latest retreat also reflected strong headwinds from a global chip-industry downturn due to weakening demand for semiconductors and suppressed consumer spending on tech products because of concerns about high inflation.
The tech giant said Friday it expects its third-quarter operating profit to slump 32% on year.
The average contract prices for DRAM and NAND flash memory chips–a key earnings and revenue growth driver for Samsung Electronics–dropped by 15% and 28% on quarter, respectively, during the July-September period, according to Taiwanese market research firm TrendForce.
Samsung Electronics is likely to continue to suffer from weaker earnings growth until the second quarter of 2023 because of softer-than-expected demand for memory chips and likely further declines in chip prices, Seoul-based Hanwha Investment & Securities analyst Kim Kwang-jin said in a research note Tuesday.
Hanwha Investment cut the stock’s target by 9.8% to KRW73,000 but maintained its buy rating, citing a possible chip-industry recovery later in 2023.
Write to Kwanwoo Jun at [email protected]
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