Stronger Korean won trims Q3 profit forecasts for chip and display makers

Over the past two months the Korean won has strengthened markedly, moving from 1,480 won per dollar in July to around 1,382 won in September, a 6.6 percent narrowing of the exchange rate. This shift has led brokerages to cut third-quarter earnings forecasts for firms that earn heavily in dollars, notably Samsung Electronics and SK hynix. Samsung’s operating-profit consensus slipped from 122.35 trillion won to 111.38 trillion won, and SK hynix’s estimate fell from 83.76 trillion won to 78.13 trillion won.

Analysts explain that a stronger won reduces the converted value of overseas sales while many costs remain won-based, squeezing margins. Daishin Securities’ Ryu Hyung-keun lowered his profit projections for both companies, and SK hynix warned a 10 percent won-dollar move would shave about 4.75 trillion won from pre-tax profit. LG Display also faces a steep profit decline, with analyst Kwon Min-kyu forecasting a 40 percent year-on-year drop for Q3.