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Home / Business / Samsung’s 2020 third-quarter earnings report forecasts fierce competition and weak demand

Samsung’s 2020 third-quarter earnings report forecasts fierce competition and weak demand



The leftist South Korean flag and the Samsung Electronics flag flew outside the company’s headquarters in Seoul, South Korea on July 5, 2019.

Bell | Bloomberg | Getty Images

Samsung Electronics said on Thursday that it expects to see a decline in profits in the three months ending December 31

due to weak demand for memory chips and fierce competition from smartphones and consumer electronics.

The world’s largest smartphone manufacturer announced that operating profit for the July-September quarter increased by 59% year-on-year to 12.35 trillion won (approximately US$10.89 billion), in line with previous expectations. Samsung said that part of the reason is the increase in demand for smartphones and consumer electronics – sales of smartphones (including new flagship models like the Galaxy Note20) have increased by nearly 50%.

Samsung’s stock price fell 1.19% in early trading, following the overall decline in the South Korean market, the Kospi index fell 1.27%.

The company said in a statement: “Looking forward, Samsung Electronics expects a decline in profit in the fourth quarter due to weak demand for memory chips from server customers and increased competition from mobile phones and consumer electronics.”

The low price of storage chips used in data center servers may drag down the main profitable semiconductor business in the last three months of 2020. For smartphones, personal computers and graphics processing units, game consoles, and Samsung, it is expected that personal computers will grow.

South Korean technology giants said that the mobile business may see a decline in smartphone sales. However, because Apple is a customer, the display department is expected to increase sales of mobile panels from the third quarter due to the launch of new smart phones.

Samsung predicts that the overall global demand will recover next year, but said that the coronavirus pandemic remains uncertain.


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