Samsung Expects Demand Surge as Replacement Cycles Boost PC and Mobile Sales

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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.

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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.

Frequently Asked Questions (FAQs) Related to the Above News

What has caused Samsung to anticipate a surge in demand for its products?

Samsung is expecting increased demand due to replacement cycles for PCs and mobile devices, which are set to drive sales.

How did Samsung's operating profit perform in the July-September period?

Samsung reported an operating profit of 2.4 trillion won ($1.78 billion) for the July-September period.

How did Samsung's revenue fare during this time?

Samsung's revenue fell by 12% to 67.4 trillion won in the July-September period.

How does Samsung's profit compare to the previous year?

Samsung's profit decreased by 78% compared to the previous year but was higher than the first and second quarters of this year.

What positive developments were seen in Samsung's memory chip business in the third quarter?

Samsung's memory chip business showed signs of improvement, with losses shrinking to 3.75 trillion won in the third quarter. Samsung focused on producing more profitable advanced chips used in AI.

Why do analysts believe the industry slump is ending?

Analysts believe the industry slump is ending because manufacturers of smartphones and PCs have reduced chip inventories to levels low enough to resume purchases. Additionally, memory chip prices rebounded toward the end of the third quarter, and overall factory output in South Korea increased.

How did the market respond to Samsung's earnings announcement?

Samsung's share price rose by 0.7% following the earnings announcement, reflecting investor optimism about an expanding memory chip market rebound.

How is Samsung preparing for an increase in demand?

Samsung is planning a record capital expenditure of 53.7 trillion won, with a significant portion allocated to chip production, in anticipation of a mid-to-long term demand increase.

How did Samsung's mobile devices business perform in the third quarter?

Samsung's mobile devices business reported an operating profit of 3.3 trillion won in the third quarter, slightly higher than the previous year. The launch of premium foldable smartphones contributed to sales growth.

Why is the third quarter traditionally strong for Samsung's mobile and display businesses?

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.

What trend was observed in the market regarding major players developing their own chips?

The trend of major players developing their own chips in-house continued, as smartphone rival Apple unveiled new custom chips shortly after Samsung's earnings announcement.

How is Samsung well-positioned in the market?

Samsung's positive performance and outlook, driven by replacement cycles and advancing technology, position the company to capitalize on the growing memory chip market and maintain its competitiveness in the smartphone industry.

Please note that the FAQs provided on this page are based on the news article published. While we strive to provide accurate and up-to-date information, it is always recommended to consult relevant authorities or professionals before making any decisions or taking action based on the FAQs or the news article.

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