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THE INVESTOR
November 21, 2019
Big Reunion

Samsung

Samsung reels from low DRAM demand in Q3

  • PUBLISHED :October 31, 2019 - 15:18
  • UPDATED :October 31, 2019 - 15:18
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Korean tech titan Samsung Electronics saw its operating profit in the July-September period more than halve on-year, according to its earnings report released Oct. 31. The tech giant said it earned 7.8 trillion won ($6.7 billion) in operating profit, down from 17.6 trillion won a year earlier. Its third-quarter revenue came in at 62 trillion won, down from 65.5 trillion won in the same period last year.

By breakdown, the company’s semiconductors business posted 3.05 trillion won, continuing the downward trend that started late last year. The firm’s operating profit has been declining since it reached a record high of 13.65 trillion won in the third quarter in 2018.




“Despite improved profits from smartphones and other electronics, the weak demand in the global memory industry undermined the company’s overall earnings,” Samsung said in the report.

The mobile business unit posted 2.9 trillion won in operating profit, up from 2.2 a year earlier. It sold 85 million mobile phones and 5 million tablet PCs in the third quarter.

Samsung explained that its high-end Galaxy Note 10 and midrange Galaxy A lineups improved the profit margin. It added it would roll out high-value-added products such as 5G and foldable smartphones in the coming months.

Thanks to the increasing adoption of mobile OLED screens for mobile devices by global smartphone makers, Samsung’s display business division also saw its operating profit improve from 1.1 trillion won in the third quarter of 2018 to 1.17 trillion won in the third quarter this year.

The tech giant recently ended operations of some of its large-size LCD production lines in Asan, South Chungcheong Province, speeding up the transition from LCD to OLED.

“It will invest some 13 trillion won to transform the 8.5-Gen LCD lines in Asan into ones that produce quantum dot displays by 2025,” said a Samsung executive during an earnings conference call in the morning.

Of the investment, 10 trillion won will be used to install equipment while 3 trillion won will be spent on research and development projects.

QD displays, often called QD-OLED displays, are made of self-luminous OLEDs and QD semiconductor particles that help enhance brightness and contrast.

Around 30,000 sheets of QD displays will be produced in the initial stage, the Samsung official said.

As of the third quarter, Samsung spent 16.8 trillion won for capital expenditure -- 14 trillion won for semiconductors and 1.3 trillion won for displays. A total of 29 trillion won for infrastructure is expected to be used for this year, according to the tech behemoth.

In the fourth quarter, Samsung said it would focus on beefing up its competitiveness in new segments, such as 7-nanometer class semiconductors and QD displays.

By Kim Young-won (wone0102@heraldcorp.com)

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