Samsung’s revenue falls 10% in 2018 Q4 due to lower demand for chips and smartphones


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Samsung Electronics has experienced its biggest quarterly profit drop in two years according to its latest financial results report.

As it warned in its profit forecasts earlier this month, its results were affected by a lower than expected demand for semiconductors , which had been the engine behind the benefits of the previous quarters, even when the sales of smartphones suffered.

The company’s operating profit in the fourth quarter was 10.8 trillion won (about $9.7 billion), which is a drop of 28.7 percent from the 15.15 trillion won registered in the same period a year ago. The revenues were 59.3 trillion won a fall of 10.2 percent year on year.

Samsung’s semiconductor unit posted a quarterly operating profit of 7.8 trillion won, down from 10.8 trillion won a year ago. The operating profit of its mobile device unit was 1.5 trillion won, compared to 2.4 trillion won a year ago.

Many smartphone manufacturers are being affected by the slowdown in sales worldwide, especially in China. Renewal cycles are also lengthening as customers wait before buying new models.

Fourth quarter earnings were affected by a drop in demand for memory chips used in data centers and smartphones. The System LSI and Foundry businesses also saw profits decline due to weak seasonality. Overall earnings at the Display Panel Business decreased slightly due to growing competition between mobile display makers.

It is worth to mention that according to data provided by market research firm, Counterpoint Research, Samsung’s share of the Russian smartphone market in the second quarter of 2018 is 30%, while Huawei ranks first. In October 2018, Huawei ranked first with 31% of the Russian smartphone market. At the same time, in October, Huawei sold 2.84 million smartphones in Russia, with cumulative sales of approximately 1.665 billion yuan ($243 million).

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