Samsung Expects Surge in Demand as Replacement Cycles Boost PC and Mobile Sales
Samsung, the South Korean technology giant, is anticipating a surge in demand for its products as replacement cycles for PCs and mobile devices are set to drive sales. The company reported an operating profit of 2.4 trillion won ($1.78 billion) for the July-September period, with revenue falling 12% to 67.4 trillion won.
Although profit decreased by 78% compared to the previous year, it was higher than the first and second quarters of this year. The memory chip business also showed signs of improvement, with losses shrinking to 3.75 trillion won in the third quarter, as Samsung focused on more profitable advanced chips used in AI.
Analysts suggest that manufacturers of smartphones and PCs have reduced chip inventories to levels low enough to resume purchases, indicating the end of an industry slump. This trend is supported by the rebound in memory chip prices toward the end of the third quarter and the increase in overall factory output in South Korea.
Samsung’s share price rose by 0.7% following the earnings announcement, reflecting investor optimism about an expanding memory chip market rebound. The company is preparing for a mid-to-long term demand increase by planning a record capital expenditure of 53.7 trillion won, with a significant portion allocated to chip production.
In the mobile devices business, Samsung reported an operating profit of 3.3 trillion won, slightly higher than the previous year. The launch of premium foldable smartphones during the quarter contributed to sales growth, despite a sluggish overall smartphone market.
The third quarter is traditionally strong for Samsung’s mobile and display businesses due to the release of flagship smartphones and increased demand for display panels from clients like Apple. However, the company’s earnings were announced shortly after smartphone rival Apple unveiled new custom chips, continuing the trend of major players developing their own chips in-house.
Samsung’s positive performance and outlook indicate a shift in the market, with replacement cycles and advancing technology driving demand for PCs and mobile devices. As consumer demand gradually improves, Samsung is well-positioned to capitalize on the growing memory chip market and maintain its competitiveness in the smartphone industry.
In conclusion, Samsung expects a surge in demand as replacement cycles boost PC and mobile sales. Despite a decline in overall profit, the company’s focus on advanced chips and the rebound in memory chip prices contribute to its positive earnings. With increasing demand for smartphones and PCs, Samsung is poised to benefit from an expanding market and maintain its position as a leading technology provider.