Samsung expects declining demand for chips for smartphones and PCs

Samsung expects the demand for PC and smartphone chips to decline further in the coming period as consumers spend less. That is what the company says in the publication of its quarterly figures. Demand for server products may also decline due to economic concerns.

At the same time, Samsung turned over the past quarter a turnover of 77.2 trillion won, which translates to 58 billion euros. According to the company, that is a record for this time of year. This high turnover was partly due to the Device Solutions division of the company, which produces chips. Samsung’s profit amounted to 10.6 billion euros, 12 percent more than a year ago. This is in line with the expectations that the company recently published.

Samsung says the company saw “weak demand” for consumer products such as chips for PCs in the past quarter. According to Samsung, this is due to the geopolitical tensions, inflation and economic uncertainties that are currently at play. As a result, sales from those products declined. The company expects that to continue. At the same time, demand for server chips remained strong, contributing to the company’s record sales. The market for server chips and enterprise products is less sensitive to economic problems, Samsung says.

For example, in dram manufacturing, the company saw high sales for server products, but overall sales were lower than expected due to weak demand for memory for PCs and smartphones. The same applies to nandflash chips, which are used, for example, for SSDs. Samsung expects demand for server chips to remain strong in the second half of this year, but Samsung CEO Jin-man Han also warns investors that demand for server chips could decline in the future in the event of a global recession.

Samsung’s smartphone division saw demand decline in the past quarter. According to the company, this was also due to economic concerns, in combination with the lower demand that is normal for this time of the year. The company does say that the problems in its smartphone division’s supply chain have been largely resolved. The company does not expect a major increase in sales for the rest of the year, but emphasizes that it wants to increase sales of its flagship devices by releasing new foldables soon. The company will hold an Unpacked event in early August where those devices are expected.

Samsung’s Display division achieved relatively high turnover last quarter, but also made a loss. The company attributes the latter to decreased LCD deliveries and the development costs of QD-oled. At the same time, the company expects Samsung Display’s sales and profit margin to increase from the second half of the year, due to “rapid improvements” in QD-oldyields and an increase in the number of products with such display panels.