Won Strength Cuts Samsung Q3 Profit Outlook by 9 Percent
The Korean won's 6.6 percent gain against the dollar has forced brokerages to lower third-quarter earnings forecasts for major electronics firms.
Key points
- Samsung Electronics' Q3 operating profit consensus fell 9 percent to 111.38 trillion won following the won's appreciation.
- The Korean won strengthened from 1,480 to 1,382 per dollar between July 16 and Sept. 17, a 6.6 percent shift.
- SK hynix's Q3 profit consensus dropped 6.7 percent to 78.13 trillion won as brokers adjusted exchange rate assumptions.
Samsung Electronics' third-quarter operating profit consensus fell to 111.38 trillion won. This 9 percent drop reflects the recent strengthening of the Korean won.
The currency moved from 1,480 won per dollar in July to 1,382 on Sept. 17. This shift pressures chipmakers and display firms that rely on dollar sales.
Currency gains erode converted revenue
Brokerages originally set forecasts based on a rate of 1,450 won per dollar. The actual rate dropped to 1,336 on Sept. 9, triggering immediate estimate cuts.
Stronger won values reduce the local currency value of dollar-denominated exports. Operating costs remain fixed in won, squeezing profit margins significantly.
SK hynix faces revised profit targets
SK hynix saw its consensus operating profit drop 6.7 percent to 78.13 trillion won. Daishin Securities analyst Ryu Hyung-keun lowered his own forecast to 74.7 trillion won.
The company estimates a 10 percent exchange rate decline cuts pre-tax profit by 4.75 trillion won. This sensitivity highlights the direct financial impact of currency movement.
Display sector bears overseas exposure
LG Display expects a 40 percent year-on-year operating profit decline. Overseas revenue accounts for 94.7 percent of its total sales, increasing currency risk.
The Korea Times reports that this trend is limiting gains in memory chip stocks. Analysts cite macroeconomic uncertainty and reduced AI capital expenditure as additional factors.
