SEOUL (Reuters) – Samsung Electronics Co Ltd said weakness in the global smartphone market would slow earnings growth, as it reported record quarterly profit on Thursday thanks to strong demand for semiconductors used in servers.
The world’s biggest maker of memory chips, smartphones and television sets also flagged softer demand for smartphone OLED panels as a challenge for the second quarter, while its cash-cow chip business should remain strong.
Earnings - Growth - Company - Challenge - Weakness
“Generating overall earnings growth across the company will be a challenge due to weakness in the display panel segment and a decline in profitability in the mobile business amid rising competition in the high-end segment,” the South Korean giant said in a statement.
Samsung Electronics shares were up 2.7 percent as of 0412 GMT, while the KOSPI benchmark share price index was 1.3 percent higher, as investors shrugged off concerns about the smartphone market and seized on the outlook for memory chips.
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“Shares are rising as Samsung Electronics’ outlook for its memory chip business appears more positive than we’ve heard from other companies,” said Greg Roh, analyst at HMC Investment & Securities.
South Korean rival SK Hynix Inc and Taiwan Semiconductor Manufacturing Co Ltd (TSMC) separately warned this month of slower growth in smartphone chip sales. TSMC, a key supplier for Apple Inc’s iPhones, cut its revenue target last week.
Samsung - Electronics - Supplier - Apple - Sales
But Samsung Electronics, a rival and supplier to Apple, forecast continuing strong sales not only of server chips but mobile chips as well.
Sewon Chun, senior vice president at Samsung’s memory business, said the trend toward “high-density” chips with more processing power and bigger storage capacity would underpin demand for mobile DRAM and NAND chips this...
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