Samsung Electronics Co Ltd yesterday said the COVID-19 pandemic would hurt sales of smartphones and consumer electronics this year, while demand from data centers would fuel a recovery in memorychip markets.
Samsung chief executive Kim Ki-nam said that the coronavirus and US-China trade dispute were casting a shadow over the outlook for the South Korean tech giant, whose Galaxy smartphones vie with Apple Inc’s iPhones for global dominance.
“The global smartphone market was expected to turn to growth this year, but with the virus showing signs of being prolonged, the smartphone market is contracting, but 5G smartphone demand is expected to rise,” Samsung mobile and network business president Koh Dong-jin told the company’s annual general meeting in Seoul.
Photo: AP
While the smartphone market would shrink, Kim said the chip market — which makes up about half of Samsung’s operating profit — would see demand growth after a slump last year that was exacerbated by excess supply and US-China trade tensions.
Other chipmakers such as Broadcom Inc have either cut or pulled their sales outlook due to disruptions caused by the pandemic, but global leader Samsung said that it expected investments from data center firms, and new opportunities in areas such as 5G wireless networks and the automotive industry to drive chip sales higher this year.
At the same time, Kim said that he expected chipmakers to focus on upgrading manufacturing processes rather than expanding capacity this year, limiting supply.
Samsung’s annual general meeting drew about 400 shareholders this year, sharply down from about 1,000 last year, as South Korea battles the biggest COVID-19 outbreak in Asia outside China.
Investors were scanned with thermal cameras and checked with thermometers as they arrived, and sat two seats away from each other as part of measures to ensure the meeting could go ahead safely.
Samsung Electronics also adopted electronic voting for the meeting and encouraged shareholders to cast votes online.
Kim Hyun-suk, the company’s consumer electronics chief, said it was too early to predict how the virus would impact consumers.
“We had expected the consumer electronics market to rise slightly this year, but with the coronavirus fast spreading, uncertainties are growing faster than ever, and it is very difficult to predict the future,” he said.
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