Debate on when the current boom in semiconductors will peak was refueled Friday, as Korean securities brokerages released lower-than-expected forecasts for Samsung Electronics’ fourth-quarter earnings.

IBK Investment & Securities said in a report that Samsung would hit new highs in sales and operating profit in the fourth quarter, but the figures would be less than market expectations.

IBK’s analyst Kim Un-ho forecast fourth-quarter sales of the tech titan would reach 65.8 trillion won ($61.2 billion), a 6.6 percent on-quarter increase, but down from a previous market consensus of 70.8 trillion won. 

The company’s fourth-quarter operating profit is forecast to be 15.8 trillion won, 3.1 percent lower than the market expectation of 16.3 trillion won. The estimated figure, however, is 8.8 percent up from the firm’s third-quarter operating profit.

KB Securities and HI Investment & Securities also released a forecast of around 15 trillion won for Samsung’s fourth-quarter operating profit this week.

As disappointment spread across the financial market, the company’s share price plunged two days in a row since Wednesday due to the strong selling spree by foreign and institutional investors. 

Some in the financial market said the lower-than-expected forecasts could be attributed to increased costs incurred from providing massive incentives to executives and employees at Samsung’s device solutions business division, and possibly from the strong Korean currency against the US dollar.

Meanwhile, a view released by Morgan Stanley last month is gaining support from market watchers.

The Wall Street institution argued in a report that the memory chip boom has neared its peak, and lowered its target price for Samsung’s shares from 2.9 million won to 2.8 million won.

“Global demand for memory chips for smartphones and servers remain sluggish, while smartphone shipments are on the wane,” said Yoo Jong-woo, an analyst at Korea Investment & Securities.

According to market researcher Strategy Analytics, global smartphone shipments are forecast to drop 4.3 percent in the fourth quarter, continuing from a 3.1 percent decrease in the third quarter.

“Prices of DRAM and NAND chips are considered to have already passed their historic peaks by many market researchers, so it would be inevitable to see some slowdown in price growth,” the analyst said.

Others remain optimistic about the memory market at least for next year.

“In the first quarter of next year, demand for DRAM chips would increase from data center companies, contributing to keeping the market upbeat for the time being,” said Noh Geun-chang, an analyst at HMC Investment Securities.

Samsung’s shares closed at 2,485,000 won Friday, up 1.14 percent from Thursday’s close. The share value surged to a year’s high of 2,876,000 won on Nov. 2, but hit a new low of 2,455,000 won Thursday.

(song@heraldcorp.com)