Samsung issues earnings warning in wake of falling chip prices and OLED demand

midian182

TechSpot Editor
Staff member

The tech giant said it expects Q1 2019 profits to miss expectations due to the falling price and demand of its chips. “The company expects the scope of price declines in main memory chip products to be larger than expected,” Samsung said in a regulatory filing, which was posted a week ahead of its earnings guidance.

Chip prices have been falling for a long time now, leading to both Micron and Samsung reducing NAND and DRAM production due to low demand and oversupply. DRAMeXchange writes that DRAM chip prices were down over 20 percent on average during the first quarter.

It’s not just its chip business that is dragging down profits. The stagnant smartphone market has seen declining demand for Samsung’s display panels—weaker than expected iPhone sales, for which Samsung provides the OLEDs, have affected the Korean firm’s bottom line.

According to financial analyst firm Refinitiv SmartEstimate (via Reuters), Samsung will post an operating profit of 7.2 trillion won ($6.4 billion) for the January to March period. That’s over 50 percent lower than the 15.6 trillion won it recorded during the same period one year ago. Sales are expected to fall to 53.7 trillion won from 60.6 trillion.

It’s not all bad news. Samsung last week told shareholders that sales of memory products would likely see a revival in the second half of the year following a disappointing first half. It also expects an increase in demand for OLED panels in the last two quarters of 2019.

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edward shada

TS Rookie
You cannot continue to launch products that are too similar one right after the other. Ask IBM, they have a great main frame story for you. I own a 10 something note, I have no need for a $1000 phone that offers me little new for my use.
 
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p51d007

TS Evangelist
Well, I hope they didn't think the party would last FOREVER. Phones in the last few generations have been minor updates. Gimmicks for the most part. Brighter displays, multiple cameras, glass backs, slim bezels and other "colorful, slim and stylish" BS, which they charged more.
Now, people are finally waking up to the idea of spending 1,000.00 dollars or more is INSANE, for what amounts to a minor update.