Samsung Electronics Co. survived the first half surprisingly well but whether it can be equally lucky in the latter half remains to be seen, given the weakening memory chip prices.

The world’s largest memory chip maker likely generated an operating profit of 5.2 trillion won to 5.4 trillion won ($4.35 billion-$4.51 billion) from its core semiconductor business in the quarter ended June, which would be 50 percent higher from the previous year, according to experts.

In its preliminary second-quarter earnings report released Tuesday, Samsung Electronics projected its operating profit rose 22.7 percent year-over-year to 8.1 trillion won, well above analyst estimates of 6.3 trillion won.

Samsung Electronics shares closed Wednesday down 0.75 percent at 53,000 won, following a 2.9-percent fall the previous day.

Remote work and online schooling from the coronavirus pandemic created a huge appetite for chips among server and PC makers, driving up DRAM memory chip prices in the first half.

Investors, however, are giving a darker forecast in the latter half amid softening in chip prices.

DRAM chip prices are expected to decline as soon as this month. Fixed prices for DRAM chips stopped their five-month rally in June, remaining flat at $3.31. DRAM spot prices, used as an indicator for pricing future contracts, have slipped for the third straight month since April.

NAND flash memory chips, used in solid state drives and USBs, have also seen their fixed prices stagnate for the past three months after climbing to $4.68 in March.

Clients that stocked up on their inventories at the beginning of the year are now asking for a cut in the contract price, according to insiders.

TrendForce, which releases monthly data for memory chip fixed prices, projected DRAM and NAND prices to slide in the latter half in its latest June report.

It estimated fixed prices of DRAM chips for servers, which were behind Samsung’s stellar second-quarter results, to fall more than 5 percent in the third quarter against the previous three months. Fixed prices of PC DRAM chips were also projected to decline 5 percent.

TrendForce also forecast a 5-percent fall in NAND fixed prices in the third quarter. Demand is expected to peak in the July-September period with the release of Sony’s new PlayStation console and Apple’s new iPhone, but the price decline would deepen in the fourth quarter on waning demand, it said.

Meritz Securities projected Samsung’s chip business to earn 5.4 trillion won in the third quarter and 4.8 trillion won in the final quarter.

By Chun Gyung-woon and Kim Hyo-jin

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