Investors Eye Chipmaker As Profit Report Date Nears

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Investors Eye Chipmaker As Profit Report Date Nears

Investors are watching Samsung Electronics closely as the index-moving chipmaker prepares to release its second-quarter profit report on Friday.

Despite a series of buy opinions from analysts, foreign investors unloaded 117.5 billion won ($90.4 million) worth of the chipmaker's shares last week. Local investors are also wary, and some experts say that Samsung's semiconductor unit has been losing money since last month.

The price of 128-megabit SDRAM chips, one of Samsung's key products, has been at between $1.70 and $2.10 on spot markets, far below chipmakers' average production cost of $4 per chip. But the investment bank Credit Suisse First Boston said recently that the price would begin to rise again and reach $2.10 by the end of the year.

Most analysts expect that Samsung's second-quarter performance dropped off sharply from the first, when it posted 1.5 trillion won of operating profit and 1.2 trillion won of net profit.

An official at LG Investment & Securities Co., Gu Hi-jin, said Samsung's net profit would be 630 billion won. Chon Wu-jong, an analyst at SK Securities Co., said the net profit would be 800 billion won, while Credit Suisse First Boston said 644 billion won.

Analysts are divided. "If Samsung's stock rebounds, investors should reduce their holdings," said An Sung-ho, an analyst at Seoul Securities Co. But Mr. Chon at SK said, "The profit decline is already factored into the share price; investors should buy the stock bit by bit, as long as it rises."

by Lee Hee-sung

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