Won Strength Cuts Chipmaker Profit Forecasts by 21 Trillion Won
The South Korean won has strengthened sharply against the dollar, directly reducing the local currency value of semiconductor exports and forcing analysts to lower earnings estimates for major chipmakers.
Analysts have cut the combined 2026 operating profit forecast for Samsung Electronics and SK hynix by 21 trillion won. This reduction was recorded over a two-month period. The decline stems from a significant strengthening of the Korean won against the US dollar. The currency shift directly erodes the value of dollar-denominated export revenues.
The won appreciated 15.41 percent against the dollar from July 1 through September 10. The exchange rate moved from 1,551.2 won per dollar to 1,344.1 won per dollar. This pace of appreciation was nearly three times faster than the Japanese yen. The movement occurred while the broader dollar index slipped only 0.02 percent.
Export revenue loses value in local terms
Korean semiconductor exports reached 281 billion dollars from January to August. This figure represents a 169.6 percent increase year over year. Most of these sales are settled in US dollars. When the won strengthens, each dollar converts into fewer won. This mechanism reduces the reported earnings for domestic companies.
Nomura Securities estimates a 10 percent won gain cuts memory chipmaker operating profits by 12 percent. SK hynix disclosed that a 10 percent exchange rate move reduces pretax profit by 4.75 trillion won. The rapid currency shift reduces predictability for exporters. Small and midsize firms face higher risk due to limited hedging capabilities.
Bank targets reflect currency headwinds
Citi lowered its Samsung Electronics target price to 430,000 won on September 3. The previous target was 450,000 won. The bank also cut its SK hynix target to 3 million won from 3.1 million won. Citi attributed these revisions to currency headwinds. The adjustments reflect the direct impact of exchange rate movements on valuation models.
The consensus estimate for combined third quarter operating profit fell to 18.8 trillion won. The prior estimate was 19.9 trillion won. The full year 2026 forecast dropped to 64 trillion won from 66.1 trillion won. These figures illustrate the immediate financial impact of the stronger won.
Market dynamics may slow currency gains
Exporters are becoming reluctant to sell their dollar holdings as the won strengthens. This behavior may limit further appreciation. The won weakened 6.7 won during daytime trading on Friday to close at 1,345.9. The dollar index also climbed from 98 to 99.09.
Policy decisions by the US Federal Reserve and Bank of Japan this week could influence the currency trajectory. A potential US rate hike might reverse the won’s direction. GN markets/fx (en-US) notes that external macro factors now play a critical role in determining the pace of the won’s strength.
