South Korean tech titan Samsung leads the global smartphone market with a 23-percent share of the sector Photo: GETTY IMAGES NORTH AMERICA/AFP/File
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Samsung Electronics flags 56% fall in Q3 operating profit

5 Comments
By Drew Angerer

Samsung Electronics said Tuesday it expected operating profits to drop more than 50 percent in the third quarter amid a continued slump in the global chip market.

Operating profit for July to September was expected to reach 7.7 trillion won ($6.4 billion), down 56.2 percent from a year earlier, the world's largest maker of smartphones and memory chips said in a statement.

It marks the fourth consecutive quarter in which the South Korean tech company has recorded a profit drop in the face of falling semiconductor prices and weakened demand for its mobile devices.

Sales for the third quarter were expected to reach around 62 trillion won, down 5.3 percent from the same period last year.

Samsung withholds net profit and sector-by-sector business performance until it releases its final earnings report, which is expected later this month.

The firm is the flagship subsidiary of the giant Samsung Group, by far the biggest of the family-controlled conglomerates that dominate business in the world's 11th-largest economy, and it is crucial to South Korea's economic health.

Analysts voiced optimism for the coming months, noting that falling inventory levels for semiconductors -- which account for more than half of Samsung's profit -- will help stabilize chip prices after double-digit drops this year.

In the mobile business, Samsung took advantage of the U.S. trade ban against Chinese rival Huawei, "replacing a strong competitor in crisis" with its mid-to-low tier Galaxy A handsets, said Sujeong Lim, an analyst at Counterpoint Research.

"The new A series has turned out to be an effective weapon to take share from its Android competitors," she said.

The South Korean tech titan leads the global smartphone market with a 23-percent share of the sector, trailed by Chinese competitors Huawei and Oppo, with Apple in fourth place, according to sales tracker IHS Markit.

Samsung appealed to high-end users with the launch of its first foldable smartphone last month after faulty screens forced an embarrassing delay in April.

The firm also rolled out its flagship Note 10 devices which analysts say have sold far better than its previous models, giving Samsung a much-needed boost in its mobile sales.

The premium smartphone market has grown fiercely competitive and overall sales have cooled as a lack of major innovation has caused people to wait longer before upgrading to new models.

Samsung has also been caught up in a trade war between Japan and South Korea stemming from World War II disputes.

The row saw Tokyo impose tough restrictions on exports crucial to South Korean tech giants in July, and Samsung vice chairman Lee Jae-yong -- who called the situation a "crisis" -- has visited Tokyo to secure materials.

Adding to Samsung's woes, Lee is currently facing retrial over his role in a massive corruption scandal that brought down former president Park Geun-hye.

He was initially jailed for five years in 2017 on multiple convictions including bribery, which was reduced to a suspended sentence on appeal, only for the Supreme Court in August to order a retrial.

The first hearings in the case are expected later this month.

© 2019 AFP

©2019 GPlusMedia Inc.

5 Comments
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Ver sad, samsung is a good product esp the colours of their screens. it is the best , that i have seen, even Hwawei or any Japanese makers.

-2 ( +0 / -2 )

The row saw Tokyo impose tough restrictions on exports crucial to South Korean tech

Again, misrepresentation of the situation according to a paid-off (no doubt by Samsung) AFP hack. It's a complete falsification.

The export process has been NORMALISED... as in, previously the high tech materials were exported on a 'fast-track' basis for select, trustworthy nations. South Korea has been removed from the list of trustworthy countries who are allowed the fast-track process. South Korea was the only Asian nation on that list. Now they are treated just the same as Taiwan, China, or any other country in the region. This in now way affects anything other than export approval tims wjich could be extended by a few weeks at the most. South Korea can still obtain ALL the materials they were imprting previously. They lack nothing.

South Korea was removed from the list because it did not answer Japan's request to provide information on where the tech materials ended up (ie: which company actually used the materials for manufacturing) as it's possible that the materials could have ended up in North Korea to assist in weapons manufacture. After 3 years of repeated requests they were removed from the fast-track list. That's all.

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@Hillclimber

So far Japanese suppliers lost $250 million worth of sales to Korean buyers since July thanks to Abe san.

And Koreans are in the process of rapidly replacing Japanese suppliers, much faster than what Japanese anticipated. One year from now, Korean semiconductor industry will become Japan-free. At that point, the Japanese suppliers have lost Samsung and SK Hynix business forever, thanks to Abe san.

https://www.reuters.com/article/us-southkorea-japan-chips/sk-hynix-shifts-away-from-japanese-input-material-with-korean-product-idUSKBN1WH08Z

SK Hynix shifts away from Japanese input material with Korean product

SEOUL (Reuters) - South Korea’s SK Hynix Inc has started using a high-tech material from a Korean supplier in its chipmaking process, a company official said on Wednesday, shifting away from a Japanese product for the first time.

A SK Hynix official said it had selected an unnamed Korean company to supply high-purity hydrogen fluoride (HF), which is used in etching silicon materials and cleaning chips.

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Giving credit where it's due, Samsung's A series was very, very well done. Very competitive models.

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Samit BasuToday  12:48 am JST

So far Japanese suppliers lost $250 million worth of sales to Korean buyers since July thanks to Abe san.

This requires a citation from a non-pro Korean source.

And Koreans are in the process of rapidly replacing Japanese suppliers, much faster than what Japanese anticipated.

.. and they can kiss goodbye the quality that they acquired (paid for) by using high quality Japanese materials faster than they anticipated. You know who also doesn't use Japanese materials? China. And look at their woeful quality that destroyed their global image for generations.

You know very well that from here on in, South Korean companies disconnecting from Japan means they will only be able to compete on further price reductions, which will either ensure that a) all their manufacturing will eventually shift to slave labour in China, or b) their quality takes a huge dive downwards as they use cheaper and cheaper materials to compensate.

You can't have your cake and eat it too.

1 ( +1 / -0 )

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