Samsung warns of revenue decline due to slumping smartphone and TV sales

Samsung warns that a drop in sales from smartphones and televisions for the second quarter of this year is inevitable. The manufacturer wants to release more different high-end smartphones in the second half of this year, including folding models.

Samsung already delivered fewer smartphones in the first quarter of this year and the company attributes this to the effects of the corona pandemic, which became visible at the end of the quarter. The smartphone business nevertheless remained profitable due to, among other things, the mix of high-end models, such as the S20 and the Z Flip, the company said. For the current quarter, however, the shrinking market and the closing of stores make a drop in sales inevitable. To make improvements in the second half of the year, Samsung plans to release more foldable and Note smartphones, and bring 5g models to the masses.

Samsung also sees a sharp drop in demand for the television market due to the corona crisis. The turnover of this division already decreased due to declining demand, but Samsung did sell more high-end TVs, such as 8k models. In an explanation of the quarterly figures, Samsung reaffirmed that it will scale back its LCD production, but the company was more cautious than in its earlier announcement to completely stop production at the end of this year. For example, Samsung now says that it will gradually phase out LCD production, but will only come up with ‘QD TVs’ when production and functionality are in order. In addition, Samsung wants to prevent its customers from being hit too much by the discontinuation of LCD. With qd, Samsung refers to TVs based on quantum dot OLED panels.

In the chip manufacturing division, Samsung achieved sales growth due to, among other things, strong demand from Chinese customers for high performance computing chips. In the current quarter, Samsung plans to begin mass production of 5nm chips, using euv chip machines.

Samsung’s quarterly turnover last quarter amounted to almost 42 billion euros, which is still 5.6 percent higher than in the same period last year, mainly due to the increased demand for parts for servers and mobile phones. The operating profit amounted to almost 4.9 billion euros, which was slightly lower than last year.