Memory slump and smartphone boredom deliver one-two punch to Samsung's bottom line

Did someone say perfect storm? Well, here we are

Slowing smartphone sales and low demand for DRAM and NAND memory have taken their toll on Samsung.

cash rain

DRAM, Samsung, these profits are on fire, NAND ain't that the truth


The chaebol issued earnings guidance for the first calendar quarter of 2019 this morning.

Samsung has now forecast operating profit for the quarter ended 31 March of 6.2 trillion Korean won ($5.5bn) – a massive 60 per cent year-on-year drop from the 15.64 trillion won of Q1 2018 (PDF).

Analysts have noted that the predicted operating profit would be Sammy's lowest since the 5.2 trillion Korean won it reported in Q3 of 2016, in the wake of the firm's recall of its fiery Galaxy Note 7 handsets.

The vendor also expects consolidated first 2019 quarter sales of 52 trillion Korean won ($45.7bn). That's down 14 per cent down on its year-ago Q1 revenue of 60.46 trillion Korean won.

As well as its own smartphone biz, the company supplies displays and memory chips to other gadget firms like Apple. A year ago, sales in those departments were buoyant.

The current smartphone slowdown, however, has hit Samsung twice over. On top of that, hyperscale buyers are not purchasing as much DRAM or NAND, causing a supply glut as they use up their inventory.

That means Samsung and the other memory makers (Micron, SK Hynix, Intel, Toshiba, Western Digital) have all rolled back their output to better match the drop in demand. DRAM and NAND chip prices have slumped in response.

We'll see the real damage when Samsung reports its full results later this month.

Samsung said it expects demand to pick up in the second half of 2019, with sales boosted by demand for its latest mobe, and will no doubt be hoping that the climb out of the slump is as fast as the fall into it, if not faster. ®

Similar topics

Other stories you might like

  • Robotics and 5G to spur growth of SoC industry – report
    Big OEMs hogging production and COVID causing supply issues

    The system-on-chip (SoC) side of the semiconductor industry is poised for growth between now and 2026, when it's predicted to be worth $6.85 billion, according to an analyst's report. 

    Chances are good that there's an SoC-powered device within arm's reach of you: the tiny integrated circuits contain everything needed for a basic computer, leading to their proliferation in mobile, IoT and smart devices. 

    The report predicting the growth comes from advisory biz Technavio, which looked at a long list of companies in the SoC market. Vendors it analyzed include Apple, Broadcom, Intel, Nvidia, TSMC, Toshiba, and more. The company predicts that much of the growth between now and 2026 will stem primarily from robotics and 5G. 

    Continue reading
  • Deepfake attacks can easily trick live facial recognition systems online
    Plus: Next PyTorch release will support Apple GPUs so devs can train neural networks on their own laptops

    In brief Miscreants can easily steal someone else's identity by tricking live facial recognition software using deepfakes, according to a new report.

    Sensity AI, a startup focused on tackling identity fraud, carried out a series of pretend attacks. Engineers scanned the image of someone from an ID card, and mapped their likeness onto another person's face. Sensity then tested whether they could breach live facial recognition systems by tricking them into believing the pretend attacker is a real user.

    So-called "liveness tests" try to authenticate identities in real-time, relying on images or video streams from cameras like face recognition used to unlock mobile phones, for example. Nine out of ten vendors failed Sensity's live deepfake attacks.

    Continue reading
  • Lonestar plans to put datacenters in the Moon's lava tubes
    How? Founder tells The Register 'Robots… lots of robots'

    Imagine a future where racks of computer servers hum quietly in darkness below the surface of the Moon.

    Here is where some of the most important data is stored, to be left untouched for as long as can be. The idea sounds like something from science-fiction, but one startup that recently emerged from stealth is trying to turn it into a reality. Lonestar Data Holdings has a unique mission unlike any other cloud provider: to build datacenters on the Moon backing up the world's data.

    "It's inconceivable to me that we are keeping our most precious assets, our knowledge and our data, on Earth, where we're setting off bombs and burning things," Christopher Stott, founder and CEO of Lonestar, told The Register. "We need to put our assets in place off our planet, where we can keep it safe."

    Continue reading

Biting the hand that feeds IT © 1998–2022