South Korean chipmakers have turned optimistic about profitability for the first time in more than a year as a weaker won offers a potential boost from overseas earnings.
A Korea International Trade Association survey showed Wednesday that chip exporters' profitability outlook jumped to 112.6 for the current quarter from 77.7 in the previous quarter. The overall business outlook fell to 112 from 114.3 as expectations for orders deteriorated.
A reading between 90 and 110 indicates that sentiment remains mixed, while anything from 110 indicates optimism.
Even as chipmakers struggle with inflation pressures that have driven the cost of raw materials, the forecast of better balance sheets highlights the windfall export gains from a depreciating currency.
The currency is the biggest factor behind the surprising rise, according to Estella Kim, the KITA researcher who conducted the survey between late August and early September, a period when the won's strength was weakening.
The won has been Asia's worst performing currency after the yen this year, which is putting pressure on the Bank of Korea to consider another outsized interest-rate increase when it meets next week.
According to the KITA survey, the outlook for chip prices rose to 138.6 for the fourth quarter from 80.5 for the previous period. The total confidence among Korean exporters declined to 84.4 for the final three months of the year, from 94.4 in the third quarter. More than 1,000 companies participated in the survey, which took place in the final three months of the year.
The Samsung Electronics Co. is expected to report a slowdown in revenue growth and a drop in operating earnings for the September quarter on Friday.
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