SAMSUNG HAS SUFFERED a 60 per cent slump in profits due to waning demand for its memory chips.
The firm said on Monday that revenue for the three-month period dipped by 13 per cent year-on-year to 52.4 trillion KRW (around £35bn). Operating profit for the quarter came in at 6.2 trillion KRW; that's still a hefty £4bn, but it represents a mammoth decline of 60 per cent compared to Q1 2018.
Samsung's chip biz, which the firm has relied on heavily to drive growth previously, was the main culprit; revenue from the semiconductor business slid 27 per cent, while the firm's money-making memory unit saw revenues slip 30 per cent year-on-year.
Samsung blamed the decline on "weak seasonality and inventory adjustments", noting that its memory chip sales have been hit by weak global smartphone sales and a fall in server demand.
The company's display business also contributed to its losses; revenue declined 18 per cent because of "weaker profitability in both mobile and large displays."
While smartphone market woes have hit Samsung, the firm - unlike Google - had no trouble flogging its own devices during the first quarter. The firm boasted of "solid" sales of the Galaxy S10, and while it didn't cough on exact figures, it said it sold a total of 78 million smartphones during the three-month period.
Samsung added that it will "strengthen its product lineup through innovations such as Galaxy S10 5G and Galaxy A80 and continued reorganization of its product offerings."
Looking ahead to the second quarter, Samsung says it expects market demand for smartphones to increase slightly, with sales set to ramp up in the second half of the year thanks to the arrival of its Galaxy Note 10 and currently-borked Galaxy Fold smartphones.
Samsung is expecting "limited" improvement in the memory chip market too; while falling prices are likely to continue, it says demand will likely begin to improve for major applications such as mobile products but price declines will likely continue. µ
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