Samsung Electronics managed to maintain its operating profit of 7 trillion won in the fourth quarter of last year. It seems that falling prices of memory semiconductors have adversely affected the performance of entire businesses. It does too with and fierce competition in medium and low-priced phone businesses.
In the Samsung fourth quarter, it announced that its operating profit in last year was approximately 7.1 trillion won ($6.1 billion). Down 34.3 percent from a year earlier. Sales fell 0.5 percent on-year to 59 trillion won ($51 billion) during the same period.
Samsung Electronics’ fourth-quarter operating profit as suggested by financial information company FnGuide on the previous day is around 6.5 trillion won. It forecast sales to reach 61 trillion won during the period. Although its operating profit is slightly higher than that of stock markets, analysts say that improvement in profitability has rarely been achieved given the growing expectation of recovery of semiconductors in the third quarter.
Samsung’s consolidated-based operating profit shrank 8.8 percent in the fourth quarter of last year compared to the previous quarter. Sales fell 4.8 percent on-quarter during the same period.
Detailed performance by the business sector will not reveals in the provisional performance announcement. However, the operating profit of semiconductor business during this period was only about $3.2 billion.
Who’s to blame for Samsung 2019 fourth quarter decrease of profit?
Many have predicted that D-RAM business will have collapsed from operating profit of $2.46 billion in 3rd quarter to operating profit of $4.54 billion in 4th quarter.
Many believed that shipments of both DRAM and NAND flash memories in fourth quarter increased. However, the low average sales price has adversely affected its profitability.
According to market research firm DRAMeXchange, contract price of DDR4 8-gigabit DRAM products in global markets averaged $2.81 as of Nov. 29. This is the same level as a month ago, and remains unchanged from the price below $3.
