Earlier this week, Samsung Electronics announced that its operating profits for Q4 of 2019 fell by 34 percent, which is within its expectations. The South Korean tech giant faces the sizeable slump in profits due to the chip market suffering from a slump and hopes 2020 proves different through 5G network advancements.
Samsung is the world’s largest smartphone manufacturer and memory chip maker and reportedly has an operating profit of 7.16 trillion won or roughly $6.13 billion. Notably, its net profit also saw a fall of 5.2 trillion won or about 38 percent and its revenue fell by 1 percent that is about 59.9 trillion won, which is again within the company’s expectations.
The reason for Samsung’s year long decline was due to the falling memory chip market. In 2018, memory chips saw a sudden decline after two booming years after demand went short. Furthermore, the US-China trade disputes also impacted the company with import tariffs and more which eventually led to a massive oversupply of chips that had no market. Thus, the electronics brand is still recovering from the bow while the memory market is also slowly recovering at the same time.
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Regardless of this, Samsung saw a rise in its smartphone division, which saw improved sales and “healthy” profits with the Galaxy A series of handsets. Additionally, the company is hoping that the wider adoption of 5G networking will further improve said numbers as Samsung’s offerings are widely adopting 5G variants.
The year 2020 is expected to see 5G make a bigger impact than last year and will also slightly bump the smartphone industry as a whole. Samsung already has plans to develop integrated 5G chips and also expects its OLED displays to have higher demand alongside its new high resolution camera sensors. Although it remains to be seen, the exact pace at which the newer and faster bandwidth expands.
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(Via)
