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By Kwanwoo Jun
Shares of global semiconductor company Samsung Electronics Co. fell sharply on Tuesday amid new restrictions on technology exports to China.
Shares of the South Korean tech giant lost as much as 3.9% to 54,000 won ($37.78) before recovering from their lows. They were last down 3.0% at KRW54,500, underperforming the benchmark Kospi’s 2.3% decline.
The South Korean chip juggernaut followed a sell-off in U.S. tech stocks after the Biden administration on Friday imposed new restrictions on exports of advanced semiconductors and chip-making equipment to China. Korean markets are closed on Monday for a public holiday.
Samsung Electronics’ recent retreat reflected strong headwinds from the global chip-industry downturn, which has weakened demand for semiconductors due to high inflation and suppressed consumer spending on technology products.
The tech giant said Friday it expects its third-quarter operating profit to fall 32% year over year.
Average contract prices for DRAM and NAND flash memory chips – a key driver of revenue and revenue growth for Samsung Electronics – fell 15% and 28%, respectively, in the July-September period, according to a Taiwan market research firm. TrendForce
Samsung Electronics may continue to suffer from weak revenue growth through the second quarter of 2023 due to stronger-than-expected demand for memory chips and a further decline in chip prices, said Kim Kwang-jin, an analyst at Seoul-based Hanwha Investments and Securities. In a research note on Tuesday.
Hanwha Investments cut its target on the stock by 9.8 percent to KRW73,000, but maintained its buy rating, citing a possible chip-industry recovery in 2023.
Write to Kwanwoo Jun at kwanwoo.jun@wsj.com
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