Economy

Samsung predicts profit decline as chip market swoons:The Asahi Shimbun

Samsung predicts profit decline as chip market swoons:The Asahi Shimbun”

Based on this information, Samsung could face a 50-percent profit drop in Q3.

The plunge is also another troubling indication Samsung Electronics hasn't overcome its massive loss of market share in China and its insistence on developing pricier phones in a market now leaning towards cheaper models such as those produced by Chinese competitors, Xiaomi and Oppo.

The vice chairman agreed that memory chip prices have fallen steeply, as the company's third-quarter earnings turned out better than market expectations.

The estimates for the third quarter showed a slight rise from the April to June period, which analysts attributed mainly to improvements in the mobile business.

Revenue is estimated to post 62 trillion won, a 5.3% drop on-year from 65.46 trillion won in the same quarter last year.

Samsung did not break down the performances of its respective business divisions, saying it will announce the detailed earnings later this month. "These businesses helped earnings to recover". "The Apple's 11 sales are better than expected, so therefore, the OLED divisions are doing better than expected as well".

An ongoing trade war between the U.S. and China and export curbs by Japan on key industrial materials crucial for the production of chips and displays have also made it harder for the market to gauge demand, the watchers said.

A simmering dispute between South Korea and Japan, which has seen Tokyo impose restrictions on chemical exports crucial to the South's world-leading chip and smartphone companies - is also expected to affect Samsung Electronics' key products. "Consequently, the overall trend of contract prices also shifted from decline to stability during the third quarter".

The Korean technology giant has endured a number of hard quarters in which operating profits have fallen significantly.

Developed for the mass production of high-performance chips, the layered packaging technology requires pinpoint accuracy to vertically interconnect the DRAM chips through a three-dimensional configuration of TSV holes.

With the trade war issues hanging over the tech industry, Micron Technology warned that the tensions may prolong a memory-chip industry slump and gave a disappointing profit forecast.

"The company has reduced its inventory levels significantly, but it could take a little more time", an official said.



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