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Samsung warns chip demand for telephones, PCs will weaken as folks store much less

Samsung warns chip demand for telephones, PCs will weaken as folks store much less
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Samsung warns chip demand for telephones, PCs will weaken as folks store much less

The brand of Samsung Electronics is seen at its workplace constructing in Seoul, South Korea, March 23, 2018. REUTERS/Kim Hong-Ji

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  • Samsung expects mainly stable server chip demand
  • Intention H2 foldable telephone gross sales to surpass the newest flagship
  • Sturdy greenback helped chip earnings in Q2

SEOUL, July 28 (Reuters) – Samsung Electronics Co Ltd ( 005930.KS ) stated chip demand from smartphone and PC makers continued to weaken within the second half of the yr as folks shopped much less, however {that a} basically stable uptake of server reminiscence chips supplied a silver lining.

Whereas the world’s prime maker of reminiscence chips and smartphones posted its greatest April-June working revenue since 2018 on sturdy server chip demand, its cellular enterprise noticed earnings weaken amid geopolitical points, inflation issues, and better part and logistics prices. learn extra

“Within the reminiscence enterprise, server demand is predicted to stay stable, whereas PC and cellular demand are more likely to see additional weak spot,” the South Korean firm stated on Thursday.

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Earlier, San Diego-based Qualcomm Inc ( QCOM.O ) warned of a success to fourth-quarter gross sales from cooling smartphone demand, including to the refrain of voices cautious of chip gross sales as red-hot inflation d ‘Shopper spending drops.

Additionally, the Ukraine disaster and the COVID-19 losses in China, the world’s largest smartphone market, have worsened provide chain snags, forcing many telephone makers to chop orders for chips.

Nonetheless, Samsung was comparatively optimistic about demand for smartphones within the second half, saying that provide disruptions for the corporate have largely been resolved and that demand will both stay flat and even see single-digit progress.

It goals for foldable telephone gross sales to surpass that of its earlier flagship smartphone, Galaxy Be aware, within the second half.

Samsung’s working revenue rose to 14.1 trillion gained ($10.8 billion) for the quarter ended June 30 from 12.57 trillion gained a yr earlier, its highest second-quarter revenue since 2018 and likewise barely greater than its personal Estimate of 14 trillion gained.

The revenue included chip revenue of 9.98 trillion gained and cell phone enterprise revenue of two.62 trillion gained.

“Basic demand for servers (reminiscence chips) will stay stable as funding in core infrastructure and new progress areas reminiscent of AI and 5G are anticipated to proceed to broaden, centered on giant information middle corporations,” Samsung stated.

TSMC ( 2330.TW ), the world’s largest contract chipmaker, earlier this month additionally noticed demand for its high-tech chips utilized in information facilities. learn extra

Nonetheless, smaller rival SK Hynix ( 000660.KS ) stated on Wednesday that demand for server reminiscence chips is more likely to sluggish within the second half as information middle prospects expend their stock in the course of the recession. learn extra

Samsung’s April-June income rose 21% to 77.2 billion gained.

A powerful greenback additionally helped Samsung’s chip earnings, growing its working revenue by about 1.3 trillion gained versus the earlier quarter, the corporate stated.

Samsung’s chip gross sales are primarily made in {dollars}, whereas it studies its earnings in Korean gained, so a agency greenback interprets to increased chip earnings.

The corporate’s shares had been flat in morning buying and selling, towards a 0.7% rise within the broader market (.KS11) and a 0.8% decline in reminiscence chip rival SK Hynix shares.

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Reporting by Joyce Lee and Heekyong Yang; Edited by Himani Sarkar

Our requirements: The Thomson Reuters Belief Rules.

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