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Home / Business / The profits of Samsung are falling as the business of smartphones and chips are struggling

The profits of Samsung are falling as the business of smartphones and chips are struggling



South Korean technology company announced Tuesday its operating profit in the fourth quarter will decline by nearly 30% compared to the previous year. It attributed the sharp decline to the "weak demand" for memory chips and to "fiercer competition" in the smartphone industry.

Samsung, the world's largest smartphone maker, did not specifically mention China in its earnings forecast on Tuesday, but it's "growing" macroeconomic uncertainties are affecting business.

China, the world's largest smartphone market, is experiencing an increasing economic slowdown affecting businesses around the world.

In addition to selling their own phones, Samsung also supplies key parts such as chips and screens to other major device manufacturers. Apple's latest iPhones use Samsung's OLED screens.

The South Korean Company Expects Operating Profit of $ 1

0.8 Trillion ($ 9.6 Billion) for the Fourth Quarter of 2018, Compared to $ 15.2 Trillion ($ 13.5 Billion) in the same period last year. It forecasts sales to decline by 11% to 59 trillion won (52.5 billion dollars).

It warned that the weak performance is expected to continue, as profits are expected to remain subdued in the first quarter of 2019 due to the difficult conditions for memory business. "

The analysts were not surprised by Sam's dire predictions.

" Apparently there is competition from Chinese players, which limits Samsung's growth in many markets, including in high-growth markets such as India and Southeast Asia, "said Kiranjeet Kaur, a Singapore-based analyst with research firm IDC.

According to the latest IDC report, Samsung sells most devices worldwide, but declined 13% year-on-year in the third quarter of 2018. Chinese smartphone maker Huawei recorded Growth of 33%.

And while many smartphone makers still use Samsung as a supplier, prices for memory chips have "peaked", Kaur added.

Samsung will be the end of this month's fourth quarter results

Paula Hancocks contributed to this Ber not at.


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