The semiconductor slump is hitting its lowest point. Samsung Electronics' preliminary second-quarter earnings are shocking the market, and expectations for improvement in the second half of the year are intersecting with expectations that the slump will be longer than expected, leading to an L-shaped recession.

Samsung Electronics announced its provisional performance for the second quarter of this year on the 7th. It is estimated that consolidated sales will reach 60 trillion won and operating profit will reach 600 billion won.

This is a 22.28% decrease in sales compared to the same quarter last year, and operating profit is expected to be 600 billion won, a 95.74% decrease compared to 14.1 trillion won in the second quarter of last year, shocking the market.

Compared to the previous quarter's performance, there was a decrease in sales and operating profit. Samsung Electronics showed a 5.88% decrease in sales and a 6.25% decrease in operating profit compared to the previous quarter.

The market was shocked when the company announced its second quarter results, which were the lowest since the first quarter. As of the 7th, when the provisional performance figures were announced, Samsung Electronics' stock price fell below 70,000 won at one point during trading and to 69,800 won.

As the U.S. memory semiconductor company Micron Technology had previously announced earnings results that exceeded market expectations, causing its stock price to soar, there were expectations that Samsung Electronics would also have a similar earnings surprise and a rise in its stock price. However, it is analyzed that the stock price was affected by the announcement of poor operating profits that fell short of expectations.

In securities reports, Samsung Electronics' operating profit for the second quarter was expected to be anywhere from 'barely avoiding a deficit' to the 900 billion won range, and most people were of the view that the second quarter would be the lowest point for semiconductors. The industry and the market are expecting performance improvements starting in the third quarter.

At the recent 2023 e4ds Semiconductor Packaging Day, Noh Geun-chang, head of the Hyundai Motor Securities Research Center, expressed concerns about an L-shaped recession, saying, “From a market perspective, the semiconductor market is expected to improve starting in the fourth quarter of this year, but there is a significant possibility that it will remain gloomy until the first half of next year.”

Meanwhile, the provisional performance is an estimate based on the International Financial Reporting Standards (IFRS) adopted by Korea, and Samsung Electronics is providing it for the convenience of investors as the financial statements have not yet been finalized.

Samsung Electronics plans to receive inquiries about management status and other issues in advance to strengthen communication with investors and improve understanding, and provide answers to issues of high interest to shareholders during the earnings announcement conference call.