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Samsung Electronics has posted optimistic prospects for the coming months, citing the strength of its chip industry, even as the technology giant recorded its first decline in profits in seven quarters against a background of poor sales of its smartphones headlights. Samsung's revenue, generating more than 80 percent of its operating profit. The operating profit of the semiconductor division was high at Won11.6tn ($ 10.4 billion) in the second quarter against Won8tn a year earlier, after two years of strong worldwide demand for memory chips.
Samsung said the semiconductor outlook remains strong due to strong server demand and mobile phone launches. The global industry of $ 121 billion memory chips has exploded since the second half of 2016, due to growing demand and a limited supply.
The South Korean company posted a net profit of 11.04 billion won in the second quarter, down slightly from 11.05 billion won in the previous year and down 5.5 percent compared to the previous quarter. Sales fell 4 percent year on year to 58.5 billion won.
The company said in a statement that the force is continuing in the memory market and the growing demand for flexible organic light-emitting diode (OLED) panelboards would drive up profits in the second half of the year.
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"I think the decline in profits has been only temporary and that the company will again post record profits in the third quarter, which will likely be maintained next year," he said. said Daniel Kim to Macquarie. "Although there is controversy over the semiconductor cycle, I think the memory boom will continue next year thanks to the strong demand for data centers."
Other analysts believe that it will be difficult for Samsung to maintain its profit next year. slowing smartphone sales and signs of a slowdown in the chip industry. They expected the semiconductor cycle to decline next year due to excess capacity.
The slowdown in smartphone sales also worries the world's largest maker of smartphones, which sold about 80 million units last year, controlling more than a fifth of the global market. The operating profit of the mobile division fell from Won4tn to Won2.67tn a year earlier due to lower than expected sales of the Galaxy S9 smartphone.
Samsung's leadership is under pressure as Chinese rivals such as Xiaomi and Huawei catch up on cheap smartphones
Samsung said the mobile market would remain difficult in the second half amid increased competition. Samsung plans to launch its premium smartphone Galaxy Note 9 early August and eventually a foldable phone next year. But analysts have said that Samsung would struggle to boost sales as the industry replacement cycle lengthens due to a lack of innovation on smartphones.
Samsung shares fell 0.7% on Tuesday morning in Seoul 's trade, dropping by around 10% since the beginning of the year. Stocks are one of the worst performers this year among global technology shares, amid growing questions about its next growth drivers.
"There are concerns that corporate earnings growth could be stalled in the coming years," said Kim Young-woo at SK Securities. "The demand for memory chips next year will probably not be as strong as this year."
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