Samsung Electronics Co yesterday reported that its net profit jumped by almost half in the third quarter as the South Korean giant’s mobile and chip businesses were boosted by US sanctions against Chinese rival Huawei Technologies Co (華為).
The world’s biggest memorychip maker said that profits in the July-to-September period climbed 48.8 percent year-on-year to 9.36 trillion won (US$8.25 billion), beating expectations, Bloomberg News reported.
However, the company said that profits in the current quarter are projected to decline, with chip demand weakening, and competition intensifying in the smartphone and consumer electronics market.
Photo: AFP
Analysts have said that the firm’s introduction in August of its latest premium smartphones — the Galaxy Note 20 and the Galaxy Z Fold 2 — coupled with strong sales of mid-range phones led the firm’s third-quarter performance.
A US ban on foreign companies providing Huawei with US-origin technology — which took effect on Sept. 15, cutting off essential supplies of semiconductors and software needed for making smartphones and 5G equipment — also provided a boost.
“Samsung has been quite aggressive in new launches, as well as channel strategies, riding on the ongoing anti-China sentiment,” Counterpoint senior analyst Prachir Singh said.
A reduction in marketing costs due to the pandemic was “also helpful in terms of operating profit” for Samsung, Counterpoint analyst Lim Sujeong said.
The firm’s memory business also benefited from the feud after Huawei rushed to stock up on Samsung-made semiconductors before the US restrictions began.
That segment “posted solid earnings as healthy demand for mobile and PC products led to higher-than-expected shipments, outweighing the impact of lower memory chip prices,” the firm said in a statement.
Operating profit rose 58.7 percent to 12.35 trillion won, while sales rose 8 percent to 66.96 trillion won — a record for any quarter.
However, the firm’s immediate prospects might not be so rosy.
Samsung said that its smartphone sales for the fourth quarter are expected to decline because of “subsiding effects from new flagship model launches,” while higher marketing spending in the face of intensifying competition “is also likely to weigh down profit.”
Earlier this year, the firm was dethroned by Huawei from its long-held position as the world’s biggest smartphone maker, as the Chinese economy recovered from the COVID-19 pandemic.
Samsung still leads the global DRAM chip market, with a 43.5 percent share in the second quarter, market researcher TrendForce Corp (集邦科技) said.
Server DRAM chips enjoyed a boost as the pandemic prompted remote working and distance learning, but are now experiencing “significant oversupply,” it said.
“Therefore, contract prices of server DRAM products continue to descend to new lows,” Samsung said, forecasting a 13 to 18 percent drop in the fourth quarter.
“The situation in the semiconductor market including servers market is likely not so good, thus there is a lot of uncertainty. Server demand is also decreasing,” Lim said. “Also, as the supply for Huawei has been suspended, it may take some time for Samsung to find another client to make up for the lost business.”
Samsung shares yesterday closed down 1.53 percent in Seoul trading.
Taiwan Transport and Storage Corp (TTS, 台灣通運倉儲) yesterday unveiled its first electric tractor unit — manufactured by Volvo Trucks — in a ceremony in Taipei, and said the unit would soon be used to transport cement produced by Taiwan Cement Corp (TCC, 台灣水泥). Both TTS and TCC belong to TCC International Holdings Ltd (台泥國際集團). With the electric tractor unit, the Taipei-based cement firm would become the first in Taiwan to use electric vehicles to transport construction materials. TTS chairman Koo Kung-yi (辜公怡), Volvo Trucks vice president of sales and marketing Johan Selven, TCC president Roman Cheng (程耀輝) and Taikoo Motors Group
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
RECORD-BREAKING: TSMC’s net profit last quarter beat market expectations by expanding 8.9% and it was the best first-quarter profit in the chipmaker’s history Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), which counts Nvidia Corp as a key customer, yesterday said that artificial intelligence (AI) server chip revenue is set to more than double this year from last year amid rising demand. The chipmaker expects the growth momentum to continue in the next five years with an annual compound growth rate of 50 percent, TSMC chief executive officer C.C. Wei (魏哲家) told investors yesterday. By 2028, AI chips’ contribution to revenue would climb to about 20 percent from a percentage in the low teens, Wei said. “Almost all the AI innovators are working with TSMC to address the
FUTURE PLANS: Although the electric vehicle market is getting more competitive, Hon Hai would stick to its goal of seizing a 5 percent share globally, Young Liu said Hon Hai Precision Industry Co (鴻海精密), a major iPhone assembler and supplier of artificial intelligence (AI) servers powered by Nvidia Corp’s chips, yesterday said it has introduced a rotating chief executive structure as part of the company’s efforts to cultivate future leaders and to enhance corporate governance. The 50-year-old contract electronics maker reported sizable revenue of NT$6.16 trillion (US$189.67 billion) last year. Hon Hai, also known as Foxconn Technology Group (富士康科技集團), has been under the control of one man almost since its inception. A rotating CEO system is a rarity among Taiwanese businesses. Hon Hai has given leaders of the company’s six