In recent time, Samsung Electronics said that it anticipates first-quarter proceeds to come below market prospects due to a weak point in its memory and display businesses. In an authoritarian filing, the largest smartphone manufacturer globally asserted that it predicted a larger-than-anticipated price decline for top memory products owing to seasonal weakness in demand. Those parts are utilized in enterprise servers and mobile handsets. In January, the South Korean technology giant had also circulated the same warning for the last quarter’s gains, operating profit for 3 Months ended December was around $9.67 Billion (10.8 Trillion Korean won), which is down by over 28% from a year ago and 18% less than analysts’ predictions.
Analysts have stated that data center firms purchasing memory chips from Samsung and new chipmakers have reduced their orders in the last few months, after a period of aggressive development. In the meantime, a drop down in smartphone sales has also impacted memory chip sales of Samsung. The semiconductor market decreased by 10.2% in the fourth-quarter of 2018, as per to a note from IHS Markit previously in this month. Analysts at Citi stated in a note in the last week, “The semiconductor sector is undergoing a phase of inventory adjustment, particularly for the distribution channels.” They also added that progress rates of semiconductor sales and overseas sales in Asia have declined sharply from mid-2018 between the U.S.-China trade tensions, a financial slowdown in China, poor-than-anticipated demand for smartphones and a decrease in memory chip price.
On a similar note, recently, Samsung was in news as the technology giant foresees a tough year with trade apprehensions and slow growth. Samsung expects a rough year owing to global trade frictions, slowing financial growth, and less demand for memory chips by data center firms, the company’s co-chief executive asserted. Co-Chief Executive Kim Ki-nam stated, “We are anticipating several difficulties in 2019 like slowing growth in top economies and fears over global trade conflicts.”