Samsung’s profit could decline due to memory chip prices

Samsung Electronics

South Korean manufacturing giant, Samsung, officially confirmed that it is expecting a 56% YoY decline in its operating profit. This is basically due to the decline in global memory chip prices. However, this is still slightly better than the expectation of analysts. The two-year boom in the storage chip market ended due to the weak global economy and the decline in spending by data center customers. Since the end of last year, Samsung Electronics, the world’s highest revenue semiconductor company, has been in trouble. The memory chip business contributes 2/3 of Samsung’s profit. Thus hurting its memory chip business is detrimental to Samsung.

Samsung's profit

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Samsung said that between July – September (Q3 2019), its operating profit maybe 7.7 trillion won (about $6.44 billion). This is lower than the record of 17.6 trillion won ($14.7 billion) in the same period last year. However, it is better than the predictions of Refinitiv SmartEstimate. Samsung is also the world’s largest smartphone maker. The company will release more detailed quarterly earnings later this month. However, it did not announce any specific date for the release of the third quarter full financial report.

Since the holiday season last year, Samsung Electronics profits have been declining every quarter, and this quarter, it is likely to fall again. Analysts pointed out that Samsung hopes that the latest release of Note smartphones will boost its mobile phone sales this quarter.


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