Semiconductor sales save Samsung from flagging smartphone profits
SAMSUNG says the first quarter of 2015 has yielded better-than-expected profits, thanks to rising demand for memory chips.
While the South Korean firm had issues with lacklustre demand for smartphones, the memory chip demand made up for lower revenues in that area.
Samsung has now flagged an operating profit of US$5.4 billion in the January to Match 2015 period.
Year-on-year, this profit forecast is down 30.5 percent from the same period in 2014, but up 11.5 percent from the previous quarter.
The quarterly estimate comes just days ahead of the launch of Samsung’s latest flagship smartphone, the Galaxy S6, which Samsung hopes will present a strong competition to the Apple iPhone 6.
In 2011, Samsung took the smartphone crown from Apple. Various analysts have since estimated that Apple took back the crown in the fourth quarter of 2014, while others have the two companies tied in worldwide smartphone sales.
Samsung’s sagging performance is due largely to the increasingly competitive smartphone market as manufacturers saturate it with multiple low-to-mid cost models. It is caught between Apple in the high-end and innovative low-cost firms like China’s Xiaomi.
However, Samsung is a largely diversified company, and profits in its semiconductor business rose 35.7 percent year-on-year in the first quarter of 2015.
It has also upgraded its chipmaking plants to reduce production costs.