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South Korean Tech Giant Samsung Expects Weak Q1 Earnings Over Chip Prices

Samsung said earlier that it will propel technology innovations to tackle the unfavourable business environment and foster new growth drivers, such as Artificial Intelligence (AI) and 5G

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To get ahead in the fast-changing tech industry, Samsung said it will expand investment in burgeoning tech segments to propel growth. Wikimedia Commons

Samsung Electronics Co said on Tuesday that it is expecting weaker-than-predicted business results for the first quarter due to a sharp decline in memory chip and panel prices.

The major smartphone maker is scheduled to release its preliminary first-quarter earnings early in April.

“Due to worse-than-expected business conditions, we expect January-March earnings to remain below the market expectations,” Samsung said in a regulatory filing, Yonhap news agency reported.

The world’s largest memory chipmaker said semi-conductors are expected to fall further by larger-than-expected margins due to weak demand, and prices of LCD panels are also struggling amid a supply glut.

Samsung Electronics traded at 45,250 Won on the Seoul bourse as of 11.12 a.m., down 0.55 per cent from the previous session’s close.

The earnings warning came amid weak chip demand from the smartphone market and the protracted trade war between the US and China.

samsung
Galaxy S10 is the only smartphone that has a hole in OLED display itself. Pixabay

Although sharper-than-expected decline in chips may have dented the tech firm’s bottom line, analysts expect demand and chip prices to rebound in the second half of the year.

South Korean brokerage houses have sharply downgraded the first-quarter earnings forecasts for Samsung Electronics, citing tumbling memory chip prices.

The market consensus of Samsung’s operating profit for the first three months of the year stands at 8.33 trillion Won ($7.36 billion), down about 47 per cent from a year earlier, according to corporate tracker FnGuide.

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Analysts further painted a gloomy picture of Samsung’s earnings for the remaining quarters, saying their operating profits are unlikely to rise on-year.

Samsung said earlier that it will propel technology innovations to tackle the unfavourable business environment and foster new growth drivers, such as Artificial Intelligence (AI) and 5G. (IANS)

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5G Samsung Smartphones Capture 5% of Global Premium Market

Currently, all the 5G phones available fall within the premium segment, but this will also change in 2020

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The adoption of 5G will play a key role in the growth of the premium segment as well as the overall global smartphone market. Pixabay

5G smartphones captured 5 per cent of the global premium market in the third quarter (Q3) of 2019 led by Samsung with 74 per cent share followed by LG with 11 per cent and Vivo with 5 per cent share, a new report by Counterpoint Research has said.

According to Counterpoint Research “Market Pulse” service, the global premium market sell-through, however, declined 7 per cent YoY.

The Samsung Galaxy S10 5G was the top-selling model which captured over one-third of the total sales of all 5G devices.

“All major OEMs in the premium segment now have 5G-capable devices, except Apple. Still, Apple alone captured over half of the premium market in Q3 2019. Apple grew 1 per cent YoY increasing its market share from 48 per cent a year back to 52 per cent during the quarter. iPhone XR was the top-selling model globally in the premium segment,” Varun Mishra, Research Analyst, Counterpoint Research, said in a statement.

Huawei remained in the top three OEMs in the premium segment driven by the popularity of its P30 series, especially in China, despite the US ban.

China contributed to over 80 per cent of Huawei’s sell-through in the premium segment as compared to 73 per cent in the year ago quarter.

“The trend is likely to continue. It will be difficult for the newly launched Mate 30 series to create any progress outside China because it lacks Google Mobile Services (GMS). GMS is an important enabler for Huawei to continue its success outside China,” Mishra noted.

OnePlus recaptured its position among the top five OEMs in the segment and also led the India premium segment, which reached a record high shipment level during Q3.

South Korean smartphone maker LG also captured a spot in the top five, driven by the V50 ThinQ 5G. The firm grew 20 per cent YoY in the premium segment. This is in contrast with its overall smartphone shipments, which declined over 30 per cent YoY during Q3.

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5G smartphones captured 5 per cent of the global premium market in the third quarter (Q3) of 2019 led by Samsung with 74 per cent share followed by LG with 11 per cent and Vivo with 5 per cent share. Wikimedia Commons

The adoption of 5G will play a key role in the growth of the premium segment as well as the overall global smartphone market.

Apple will launch its 5G devices in 2020 driving upgrades among Apple users and potentially pulling in some previous Android users.

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“Currently, all the 5G phones available fall within the premium segment, but this will also change in 2020. Major Chinese OEMs will launch 5G-capable devices in the sub-$ 400 price band. China will drive the 5G segment followed by other key markets like the US and Korea,” Mishra added. (IANS)