Stronger won to test chip, display firms' Q3 profitability

The Korean won has strengthened against the US dollar, narrowing the exchange rate by 6.6 percent over two months. This shift poses a fresh earnings risk for chipmakers and display firms that rely heavily on dollar-denominated transactions, forcing brokerages to reassess their third-quarter earnings estimates. The impact on these companies' profitability will be significant, as a stronger won reduces the value of their dollar-based revenue.

Why it matters

A stronger Korean won makes exports more expensive, which could hurt the profitability of chip and display firms. This may lead to lower earnings for these companies, affecting investor sentiment.

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