Samsung, Samsung Expects Recovery in Chip Sector

Samsung Sees Better Chip Demand in 2020

Samsung Electronics Co. Ltd. on Wednesday warned of weak sales on smartphones and consumer electronics in 2020 due to the coronavirus pandemic. Although it expects demand from data centers to support the memory chip sector.

Chief Executive Kim Ki-nam said virus and the US-China trade spat dimmed the outlook for the company. Whose Galaxy smartphones are competing with Apple Inc.’s iPhones for global dominance.

Kim made comments during the firm’s annual shareholder’s meeting. It only consisted of about 400 shareholders this year, considerably lower than the attendees of around 1,000 in 2019.  

Scanning of investors took place using thermal cameras and checked with thermometers as they arrived. Additionally, they sat two seats away from each other as part of measures to ensure the meeting could proceed safely. Samsung also employed the use of electronic voting for the assembly to limit the spread of the virus.  

President of the company’s mobile and network business also stated that with the coronavirus showing signs of being prolonged, the smartphone market is contracting. But 5G smartphone demand should rise.

South Korea is fighting Asia’s worst outbreak outside China. The coronavirus is fast spreading through other markets like the US and Europe. Europe is the new epicenter of the pandemic which has caused turmoil in supply chains around the globe.

Samsung Expects Recovery in Chip Sector

Despite the likely contraction in the smartphone market, Kim was optimistic for the memory chip market. Which accounts for half of the South Korean tech giant’s operating profit.

Samsung’s CEO said the sector would see improvement in demand after declining in 2019 exacerbated by a supply surplus and the US-China trade conflict.

Disruptions triggered by the coronavirus have also led other chipmakers like Broadcom Inc. to either lower or withdraw their sales forecast.

The firm, however, believed investments from data center businesses and new opportunities in sectors such as the 5G wireless network and automobile will strengthen chip sales this year.

At the same time, CEO Kim expects memory chip makers to prioritize their manufacturing process upgrades. Instead of capacity expansions in 2020 to curb supply.

As regards the consumer electronics market, consumer electronics chief of the company Kim Hyun-suk stated that they do not know how the pandemic is will affect buyers, yet. 

The consumer electronics markets were supposed to rise slightly this year. But with the fast-spreading coronavirus, uncertainties are growing faster than ever. And it is very difficult to predict the future, according to Kim.

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