Close Menu
TechCentralTechCentral

    Subscribe to the newsletter

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    Facebook X (Twitter) YouTube LinkedIn
    WhatsApp Facebook X (Twitter) LinkedIn YouTube
    TechCentralTechCentral
    • News

      Vodacom’s Maziv deal gets makeover ahead of crucial hearing

      18 July 2025

      Cut electricity prices for data centres: Andile Ngcaba

      18 July 2025

      Takealot taps Mr D to deliver toys, pet food and future growth

      18 July 2025

      ‘Oh, Ani!’: Elon’s edgy bot stirs ethical storm

      18 July 2025

      Trump U-turn on Nvidia spurs talk of grand bargain with China

      18 July 2025
    • World

      Grok 4 arrives with bold claims and fresh controversy

      10 July 2025

      Samsung’s bet on folding phones faces major test

      10 July 2025

      Bitcoin pushes higher into record territory

      10 July 2025

      OpenAI to launch web browser in direct challenge to Google Chrome

      10 July 2025

      Cupertino vs Brussels: Apple challenges Big Tech crackdown

      7 July 2025
    • In-depth

      The 1940s visionary who imagined the Information Age

      14 July 2025

      MultiChoice is working on a wholesale overhaul of DStv

      10 July 2025

      Siemens is battling Big Tech for AI supremacy in factories

      24 June 2025

      The algorithm will sing now: why musicians should be worried about AI

      20 June 2025

      Meta bets $72-billion on AI – and investors love it

      17 June 2025
    • TCS

      TCS+ | Samsung unveils significant new safety feature for Galaxy A-series phones

      16 July 2025

      TCS+ | MVNX on the opportunities in South Africa’s booming MVNO market

      11 July 2025

      TCS | Connecting Saffas – Renier Lombard on The Lekker Network

      7 July 2025

      TechCentral Nexus S0E4: Takealot’s big Post Office jobs plan

      4 July 2025

      TCS | Tech, townships and tenacity: Spar’s plan to win with Spar2U

      3 July 2025
    • Opinion

      A smarter approach to digital transformation in ICT distribution

      15 July 2025

      In defence of equity alternatives for BEE

      30 June 2025

      E-commerce in ICT distribution: enabler or disruptor?

      30 June 2025

      South Africa pioneered drone laws a decade ago – now it must catch up

      17 June 2025

      AI and the future of ICT distribution

      16 June 2025
    • Company Hubs
      • Africa Data Centres
      • AfriGIS
      • Altron Digital Business
      • Altron Document Solutions
      • Altron Group
      • Arctic Wolf
      • AvertITD
      • Braintree
      • CallMiner
      • CambriLearn
      • CYBER1 Solutions
      • Digicloud Africa
      • Digimune
      • Domains.co.za
      • ESET
      • Euphoria Telecom
      • Incredible Business
      • iONLINE
      • Iris Network Systems
      • LSD Open
      • NEC XON
      • Network Platforms
      • Next DLP
      • Ovations
      • Paracon
      • Paratus
      • Q-KON
      • SevenC
      • SkyWire
      • Solid8 Technologies
      • Telit Cinterion
      • Tenable
      • Vertiv
      • Videri Digital
      • Wipro
      • Workday
    • Sections
      • AI and machine learning
      • Banking
      • Broadcasting and Media
      • Cloud services
      • Contact centres and CX
      • Cryptocurrencies
      • Education and skills
      • Electronics and hardware
      • Energy and sustainability
      • Enterprise software
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Lifestyle
      • Motoring
      • Public sector
      • Retail and e-commerce
      • Science
      • SMEs and start-ups
      • Social media
      • Talent and leadership
      • Telecoms
    • Events
    • Advertise
    TechCentralTechCentral
    Home » Investment » Samsung earnings top estimates despite smartphone pressures

    Samsung earnings top estimates despite smartphone pressures

    By Agency Staff31 October 2018
    Twitter LinkedIn Facebook WhatsApp Email Telegram Copy Link
    News Alerts
    WhatsApp

    Samsung Electronics has posted quarterly profit that topped analyst estimates on growth in its memory chip business, but signalled caution in semiconductors by announcing a cut in capital spending for the year.

    Net income rose to 13-trillion won (US$11.4-billion) in the three months ended September, the Suwon, South Korea-based company said in a filing on Wednesday. That compares to the 12.9-trillion won average of estimates compiled by Bloomberg. Capital spending this year will drop 27% to 31.8-trillion won.

    Samsung said it’s seeing “weak seasonality” for the chip market in the fourth quarter, and warned that earnings would decline in the period. Assessing demand for memory forms the heart of Samsung’s business plans as the semiconductor division provides the biggest chunk of profits for the company that also makes smartphones and display panels. As it becomes more and more difficult to cut costs in memory production, manufacturers such as Samsung scrutinise prices while adjusting spending on plants and equipment.

    While Samsung is the world’s biggest handset maker, it’s struggling with shrinking market share as Chinese rivals Huawei and Oppo catch up

    “Suppliers must react faster than in the past to oversupply, which will stop the industry from going through long down cycles,” said Mike Howard, vice president of memory research at French researcher Yole Developpement. “If suppliers don’t react promptly to a weak market by cutting capex and thereby future supply, then they could see prices decline more than 25% in a year, which would be very bad for margins.”

    Samsung shares rose as much as 2.4% in early trade on Wednesday before falling as much as 1.1%.

    Operating profit was 17.6-trillion won on sales of 65.5-trillion won, the company said, in line with preliminary numbers released earlier this month.

    Samsung, SK Hynix and Micron Technology together control more than 90% of the market for dynamic random access memory, or DRAM, chips, used in everything from data servers to smartphones. Operating income from the chip unit amounted to 13.7-trillion won, accounting for the lion’s share of profit.

    Contract prices for 32GB DRAM server modules fell 0.1% in the three months ended September, the first quarterly decline since 2016, according to InSpectrum Tech. Prices for 128GB MLC NAND flash memory chips fell about 6.9%.

    Smartphone woes

    Samsung’s smartphone division posted 2.2-trillion won in operating income, down from 3.3-trillion won a year earlier.

    While Samsung is the world’s biggest handset maker, it’s struggling with shrinking market share as Chinese rivals Huawei and Oppo catch up while Apple seeks to win over shoppers for premium devices.

    Samsung’s operating profit from its display business was 1.1-trillion won, up from 970-billion won a year earlier. The display division benefited from “increased demand for flexible displays from major customers”, Samsung said in a statement, adding that it expects “solid demand to continue in the OLED business”. Samsung supplies OLED screens to Apple for its iPhones even as the two companies vie for dominance in the premium phone market.

    “Chips and displays led the earnings,” said Greg Roh, a Seoul-based analyst at Hyundai Motor Securities. “Displays did better than expected and we think that’s because Samsung shipped more than 30 million units of large 6.5-inch screens for iPhones.”

    Samsung’s consumer electronics unit, which includes TVs and appliances, had operating profit of 560-billion won.

    Samsung is one of South Korea’s biggest exporters and said earlier this year that one of its biggest obstacles for business would be global protectionism, warning its employees to brace for potential implications. The company is expanding its ability to produce memory chips and smartphones, spending tens of billions of dollars in semiconductor plants and building the world’s largest smartphone factory in India.

    “The share price should rebound on confidence that demand for memory chips is going to go back up in the bottom half of next year,” said Song Myung-sup, an analyst at HI Investment & Securities in Seoul. “We’re searching for clues on it.”  — Reported by Sam Kim, (c) 2018 Bloomberg LP



    Apple Huawei OPPO Samsung
    Subscribe to TechCentral Subscribe to TechCentral
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email Copy Link
    Previous ArticleZuckerberg looks beyond the news feed for Facebook’s future
    Next Article SABC is ‘technically insolvent’, must retrench staff

    Related Posts

    TCS+ | Samsung unveils significant new safety feature for Galaxy A-series phones

    16 July 2025

    Mental wellness at scale: how Mac fuels October Health’s mission

    15 July 2025

    Nvidia CEO to hold high-stakes media briefing in Beijing

    13 July 2025
    Company News

    Vertiv to acquire custom rack solutions manufacturer

    18 July 2025

    SA businesses embrace gen AI – but strategy and skills are lagging

    17 July 2025

    Ransomware in South Africa: the human factor behind the growing crisis

    16 July 2025
    Opinion

    A smarter approach to digital transformation in ICT distribution

    15 July 2025

    In defence of equity alternatives for BEE

    30 June 2025

    E-commerce in ICT distribution: enabler or disruptor?

    30 June 2025

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2025 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.