Analyst Note| Kazunori Ito |
Samsung Electronics’ December quarter preliminary numbers fell short of market consensus and our forecasts published in late October. Samsung guides KRW 70 trillion for sales, which is 8.6% down from the previous year and 8.8% down sequentially; and KRW 4.3 trillion for operating income, which is 69% down from the previous year and 60% down sequentially. Its operating margin of 6.1% is the lowest in the past decade. Although the company does not disclose segment breakdowns, we attribute this to weaker-than-expected memory shipments. In late December, Micron Technology reported that the bit shipments declined in the mid-20% range and prices declined in the low-20% range sequentially for DRAM in the November quarter. Samsung had guided for its December quarter DRAM shipment to increase sequentially, but we estimate that it has ended much closer to Micron’s number.