Samsung tops profit estimates, warns of weaker phone demand

Samsung's memory business senior vice president, Sewon Chun, said the demand for mobile NAND and DRAM chips would be strengthened by this year's trend towards bigger storage capacity and more processing power offering "high-density" chips.

The first quarter sees a typically low demand for consumer electronics products but Samsung has been immune to seasonally shifting demand in the consumer electronics market thanks to what has become a perennially lucrative business of memory chips. The South Korean giant is seeking to extend its dominance with more investments even as global trade tensions add to market uncertainties. Samsung Display took a hit due to increased competition in the LCD market as well as slower demand for flexible OLED panels (which have to compete with rigid OLEDs and LTPS LCD panels).

Samsung's TV business is forecast to deliver year-on-year growth in the second quarter. The division's sales rose 3.4 percent in the latest quarter, compared with 20 percent for Samsung as a whole.

Samsung's chips unit posted operating profit of 11.6 trillion won, three times as much as the higher-profile mobile division.

The overall business outlook for the second half regarding components is positive, as the company looks forward to strong demand for DRAM and increased sales of OLED panels.

Samsung Elextronics said its operating profit had reached 15.6 trillion KRW (14.4 billion USD) in the first quarter of 2018, which is 58% more than an year earlier, and is the same amount as the company predicts. Citing industry source, the report adds that the Cupertino tech giant is asking Samsung to reduce the unit price of its OLED panels to USA $100, down from USA $110.

Total sales grew 19.8 per cent to 60.56 trillion won and Samsung said it expected the memory business to maintain its strong performance in the second quarter.

Past year in South Korea Apple had to face a critical moment when old iPhone users from the country complained that Apple purposely slowed down older phones with iOS 11 update. LG Display shipped 1.7 million OLED TV panels late past year.

Shares of Samsung Electronics moved up 2.74 percent to 2,589,000 won as of 1:37 p.m. Apple purchased from Samsung 50 million OLED panels in 2017.

  • Arturo Norris