It is only a year since Samsung was able to celebrate: With a profit of 14 billion euros, the third quarter of 2018 was by far the best in the company's history. One year later, the concern is worried. The profits are likely to have slumped significantly, Samsung warned shareholders on Tuesday. Above all, the weakening business with microchips, smartphones and televisions creates problems for the group.
For the fourth quarter in a row, the technology giant Samsung expects a decline in operating profit mainly due to falling chip prices. The leader in memory chips, smartphones and televisions from South Korea said on Tuesday in its earnings forecast for the third quarter of 2019, the profits from the core businesses would decrease year-on-year by 56 percent to 7.7 trillion won (about 5.9 billion euros). Nevertheless, the numbers were above market expectations.
In terms of sales, Samsung expects a decline of 5.3 percent to 62 trillion won. Accurate business figures are presented by the Group as usual at a later date.
Bad for Samsung: The chip market is weakening
Since the end of last year, Samsung is struggling with the consequences of a weaker chip market. Among other things, an oversupply and also the trade dispute between the US and China burdened the industry. With semiconductors, Samsung earns by far the most money.
For smartphones, the competition from China is putting the market leader under heavy pressure. Recently, however, Samsung was able to benefit from the US sanctions against its competitor Huawei. Samsung places its hopes among other things on the 5G version from the Galaxy S10 series as well as the newer Galaxy Note 10. The group had brought with the S10 5G the world's first available smart phone with built-in mobile chip for the new high-speed networks in April on the market.