Samsung Electronics sees gradual chip rebound in 2020

1 Comment
By Hyunjoo Jin and Heekyong Yang

Samsung Electronics Co Ltd said on Thursday it expects earnings to bounce back in 2020 after a fourth-quarter slump, helped by a gradual recovery in memory chip demand from data centre customers and 5G smartphone makers.

The cautiously optimistic outlook from the world's biggest memory chip and smartphone maker draws a line under its worst year since 2015. It also echoes positive guidance from peers like Intel Corp and TSMC, signalling a rebound in chip prices after a lengthy slide.

The South Korean conglomerate reported operating profit of 7.16 trillion won ($6.13 billion), down 34% and in line with its own previous estimate. Net profit fell 38% to 5.2 trillion won, with revenue easing 1% to 59.9 trillion won - also meeting estimates.

"Looking ahead to 2020, Samsung expects improvements in overall business performance but also sees continued uncertainties in the global business environment," Samsung said in a statement. It didn't identify particular issues that could affect its operations.

The United States and China reached an initial deal late last year to resolve a long-running trade row that had disrupted global business, though some issues remain unresolved. Samsung rival Apple Inc earlier this week used a wider-than-normal prediction range for a revenue forecast citing uncertainty created by the coronavirus outbreak in China which economists fear could hurt the global economy.

For first-quarter 2020, Samsung said it expected earnings to fall reflecting low seasonal demand.

Fourth-quarter operating profit more than halved to 3.45 trillion won in Samsung's mainstay chip division, while mobile division profit improved nearly 67% to 2.52 trillion won.

Samsung said the pace of 5G smartphone expansion and its effects should be monitored closely, but the company sees demand picking up around mass-market models as major manufacturers expand their 5G lineups.

Shares fell 1.4% by 0125 GMT, trailing the wider market's 0.6% drop. Samsung shares rallied 44% last year, as expectations of an easing of U.S.-China trade tensions fuelled hope of a rebound in the chip industry.

© (c) Copyright Thomson Reuters 2020.

©2020 GPlusMedia Inc.

1 Comment
Login to comment

I expect less than 3 comments on this article - people on this forum are eerily quiet when it comes to anything and everything Samsung lol

0 ( +0 / -0 )

Login to leave a comment

Facebook users

Use your Facebook account to login or register with JapanToday. By doing so, you will also receive an email inviting you to receive our news alerts.

Facebook Connect

Login with your JapanToday account

User registration

Articles, Offers & Useful Resources

A mix of what's trending on our other sites