AI supply chain exposure splits Q3 outlook for Samsung, LG parts units
Exposure to the artificial intelligence (AI) supply chain is splitting the third-quarter earnings outlooks for LG Innotek and Samsung Electro-Mechanics. The former faces weaker earnings prospects because of its optics-heavy sales mix and sensitivity to foreign exchange fluctuations, while the latter is offsetting currency-related pressure with a growing contribution from multilayer ceramic…
Exposure to the artificial intelligence supply chain is creating uncertainty around Q3 earnings predictions for LG Innotek and Samsung Electro-Mechanics. LG Innotek is facing a decline in earnings potential due to its optics-heavy product lineup and vulnerability to currency shifts, whereas Samsung Electro-Mechanics is attempting to counteract the impact of fluctuating exchange rates by increasing revenue from multilayer ceramic capacitors (MLCCs) and semiconductor substrates.
According to FnGuide, a market analysis firm, the average estimate for LG Innotek's Q3 operating income is now projected at 202.9 billion won, a significant 32.8% decrease from 302 billion won in the previous quarter. The revised revenue prediction is 6.1 trillion won, a drop from 6.32 trillion won. This unfavorable outlook has negatively affected LG Innotek's stock, causing it to decrease by 15.47% on Monday.
The main driver of this decline seems to be the impact of foreign exchange fluctuations, with raw materials and inventory costs influenced by the won's weakened status resulting in reduced profit margins.
Written by urgent.news from The Korea Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
