Attendees wait to enter the Samsung Electronics booth under a large LED display of smart connected home products during the Consumer Electronics Show (CES) in Las Vegas, Nevada on January 6, 2023.
Patrick T. Fallon | AFP | Getty Images
Asian semiconductor stocks tumbled after South Korean chip giant Samsung Electronics posted its worst earnings decline since the third quarter of 2014.
Operating profit for the fourth quarter fell to KRW 4.31 trillion ($3.4 billion), down 69% from KRW 13.87 trillion in the same period last year.
Operating profit for the second half of 2022 was the lowest since the quarter through September 2014 when it recorded KRW 4 trillion.
This comes as global smartphone shipments plunged to their lowest level since 2013, recording the largest drop ever.
Shares of Asian semiconductor makers fell, Samsung said Continue capital investment A total of 47.9 trillion won was spent on semiconductors in 2022.
The company was widely expected to hold back further spending as global demand deteriorated.
Samsung Electronics shares fell 3.6% in the Seoul trading session on Tuesday. Rivals such as SK Hynix also saw him drop more than 2%. Taiwan semiconductor manufacturing company Asian trade also fell 3.9%.
japanese chip maker Tokyo Electron fell 1.14%, Renesas Electronics lose 0.97% advance test It fell 1.7%. laser tech also fell 2.07%.
SK Kim of Daiwa Capital Markets told CNBC’s “Street Signs Asia” that without meaningful adjustments in production, it would be difficult to meet the current supply and demand mismatch.
US semiconductor manufacturer micron last month announced it would cut its headcount by 10% in 2023, which Kim said was “not enough.”
“We are looking to Samsung and other major memory manufacturers. [to] Reduce production by at least 20%. This is what we expected. [the] The end of this quarter is over Q2,” said Kim.
Despite deteriorating economic conditions, Samsung Electronics said it expects demand to pick up later this year.
Semiconductors power everything from smartphones to electric vehicles. I think the hit stocks in this sector look poised for a recovery.
“For 2023, we expect continued macroeconomic uncertainty, but we expect demand to begin to recover in the second half of the year,” he said. Press release.
“The semiconductor business will continue to strengthen its market and technology leadership and increase the proportion of advanced nodes and products.”
“Recovery Preparation”
JP Morgan Private Bank said the semiconductor industry offers an attractive entry point for investors as semiconductor stocks plunge in 2022.
“Price movements, earnings forecasts, [price-to-earnings] Multiple, the industry seems to be nearing a cyclical bottom right now,” said strategists Jacob Manoukian and Jonathan Linden. report It was announced earlier this month, citing data from the World Semiconductor Trade Statistics.
“Semiconductors power everything from smartphones to electric vehicles. We believe the sector’s hit stocks look poised for a recovery,” they wrote. increase.
Yuanta Securities’ Daniel Yoo agreed that it may be time to buy chip stocks.
“I think it’s an opportunity to buy, but the question is [mark] Whether there will be a really big turnaround in Q2 or Q3,” he told CNBC’s “Street Signs Asia.”
“We continue to see a significant increase in demand for data centers and various sectors,” said Yoo. There is also the possibility that AI-related demand will pick up this year.”
– CNBC’s Chery Kang contributed to this report.
