Samsung Warns of Profit Decline Due to Lower Demand for Memory

After Apple, Samsung today reported that it likely won’t be able to reach the originally estimated profit for Q4 ending on December 31st 2018. The company only recently reported its highest ever profits, but due to unprecedented changes in the market for memory chips, the company says it’s expecting major declines in sales and profit year-over-year.

Samsung said the company generated an operating profit of 10.8 trillion Korean won, which is roughly around $9.67 billion. Investors and analysts predicted the earnings to be 13.8 trillion Korean won, and Samsung is going to miss the market expectations by around 18.18%. The figure was down 28.71% year-over-year,

Samsung is blaming the decline in its memory chip business. The company has reportedly experienced lower-than-demand for memory chips from its data centre customers, according to CNBC. The decline led to a decline in prices, and sales, leading to the decline in profits for Samsung.

The company also stated that flat sales in the “stagnant and fiercely competitive market” of smartphones, combined with the marketing expenses, has led to a decline in profit. It says earnings will continue to be “subdued” because of the low-demand for its memory chip business, though it’s hoping its foldable phone and 5G will help its business recover later in the year.