The Inquirer

Samsung Electronics expects a tough year ahead for the chip industry

Weak global economic conditions will lead to heightened competition in memory chips

semiconductor-technology-chip
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SAMSUNG'S ELECTRONICS ARM has said that 2016 will be a tough year as a difficult business environment and weak global economic conditions lead to heightened competition in the memory chip and smartphone markets.

A report on Reuters said that Samsung Electronics CEO Kwon Oh-hyun told employees in a new year address on Monday that growth will be slow across the world tin 2016.

"Low global growth will persist this year with greater uncertainty stemming from issues such as financial risks for emerging countries," Kwon warned.

The firm failed to provide detailed financial forecasts to back this up, but the remarks came amid growing concerns that results for the last quarter of 2015 may be weaker than previously expected.

Korea Investment issued a separate report alongside Samsung's predictions stating that the negative impact from weak demand and falling prices for semiconductors and liquid crystal display industries "was likely bigger than initially anticipated".

Oh-hyun's comments come as quite a surprise considering the recent news from Samsung Electronics. Last month, a report in South Korea's Electronic Times, which cited unknown sources, said that the unit will start making new chips for AMD sometime in 2016.

The paper's contacts claimed that the deal will see Samsung's foundry business and California semiconductor foundry GlobalFoundries join forces to start producing a central processing chip as well as a graphics processing chip using 14nm technology.

It was also rumoured earlier last year that Samsung fended off competition from TSMC to supply the main chip for the iPhone 7. Sources in the semiconductor industry said that the firm will supply the A9 application processor for the iPhone 7 following news that the firm will also supply its own chip in the upcoming Galaxy S6 smartphone.

Auto firm Audi signed up Samsung Electronics to its Progressive SemiConductor Programme in November to supply its cars with semiconductor memory.

The agreement, made between Samsung Electronics president of semiconductor business Dr. Kinam Kim and Audi executive VP of electronic development Ricky Hudi, will see the two companies share technologies "to drive innovation and ideas for the automotive industry". µ

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