Seen above is the head office of Samsung Electronics in South Korea. The tech giant faced big losses in its memory chip business in the second quarter but is expected to turn a profit late this year. Photo courtesy of Samsung Electronics

Korean memory chipmakers are expected to turn around soon

World’s leading memory chipmakers Samsung Electronics and SK hynix remained unprofitable in the chip business during the second quarter of this year. But they managed to reduce the size of the deficits.

Samsung disclosed its second-quarter results on July 27, which showed that its semiconductor division had suffered $3.41 billion in deficits compared to $7.8 billion in profits a year ago.

But the figure is less than the business bellwether’s first-quarter loss of $3.6 billion.

As other segments involving smartphones and flat-panel displays recorded solid performances, however, Samsung Electronics managed to remain profitable overall with an operating income of $524 million.

Still, Samsung vowed in a statement to “continue to strengthen mid- to long-term competitiveness by increasing investments in infrastructure, R&D, and packaging technology.”

No. 2 player SK hynix saw its second-quarter operating loss shrink to $2.3 billion from $2.7 billion during the first three months of 2023. During the same period of last year, it chalked up an operating profit of $3.3 billion.

“The global memory chip business is expected to get much better in the latter half of this year and next year as inventory held by major firms go down fast,” business tracker Leaders Index CEO Park Ju-gun said.

“As a result, Samsung Electronics and SK hynix are likely to cut down on their losses and turn a profit in the near future.”

While the two tech giants struggled, another major South Korean corporation Hyundai Motor cruised well in the April-June period by racking up huge profits.

The operating income of the world’s No. 3 automaker in terms of sales along with its affiliate Kia amounted to $3.3 billion, up 42.2 percent from a year before.

Underpinned by the strong performances, Hyundai Motor expected that its annual sales would grow between 14 percent and 15 percent from the previous guidance of between 10.5 percent and 11.5 percent.