3Q profit plunges amid weak demand for chips
Samsung Electronics saw its bottom line more than halve during the July-September period from a year ago due to the struggling memory chip market, which shows no signs of rebounding.
The Seoul-based outfit said on September 31 that its third-quarter profit amounted to 62 trillion won, down 5.3 percent from a year before, while net profit stood at 6.3 trillion won, down 52.3 percent.
The country’s largest company by any measure struggled during the three-month period because the weak memory chip demand chipped away at its net income.
Samsung is the world’s largest maker of memory chips.
Samsung expected that things would improve in the fourth quarter and next year. But the outfit remained cautious as there remain so many uncertainties in the global economy.
“Looking ahead to 2020, while challenging to provide a detailed forecast due to ongoing uncertainties involving macroeconomic issues, there are positive signs on the demand outlook from data center customers, while expansion of 5G smartphones is expected to continue to lead the higher density trends,” it said.
“However, demand for 2020 should be viewed with caution as uncertainties remain in the macroeconomic environment. As such, the company plans to focus more on flexible investment and capacity operation depending on market conditions.”
Samsung, also the world’s largest smartphone manufacturer, predicted that its technological leadership would underpin the company in the handset business down the road.
“Looking ahead to 2020, consumer demand for 5G devices is expected to rise as 5G networks expand globally, while competition is likely to remain fierce. The company plans to offer more 5G devices and foldable products to enhance its competitiveness and build a foundation for further growth,” it said.
“For the network business in the fourth quarter and the coming year, the Company will remain an active player in expanding South Korea’s 5G coverage and foster growth in other global markets like the United States and Japan.”
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