Demand For Memory Business Better Than Expected During Q3 2020: Samsung

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Samsung Electronics’ semiconductor businesses posted KRW 18.8 trillion in consolidated revenue and KRW 5.54 trillion in operating profit in the third quarter

Samsung Electronics reported today KRW 66.96 trillion in consolidated revenue and KRW 12.35 trillion in operating profit for the third quarter ended 30 September 2020. The company’s quarterly operating profit rose 52 per cent from the previous quarter. Its third-quarter operating profit was also 59 per cent higher year-on-year on stronger sales of memory chips and consumer products.

The company expects profit to decline in the fourth quarter amid weakening memory chip demand from server customers and intensifying competition in mobile phones and consumer electronics.

“Samsung aims to enhance its leadership in memory chips through expansion of next-generation process node, flexible production management to meet immediate demand and timely investment to address demand over the mid- to long-term,” read Samsung’s official statement.

The company’s capital expenditures in the third quarter stood at KRW 8.4 trillion, including KRW 6.6 trillion spent on semiconductors and KRW 1.5 trillion on displays.

Memory business better than expected

Samsung’s semiconductor businesses posted KRW 18.8 trillion in consolidated revenue and KRW 5.54 trillion in operating profit in the third quarter. “Overall demand in the Memory Business was better than expected as demand for mobile applications began to recover, even as demand for servers was somewhat weaker than the first half,” read Samsung’s official report.

Looking to the fourth quarter for DRAM, Samsung noted that the mobile demand is expected to increase with new smartphone launches, while server demand is expected to remain weak as inventory adjustments continue. For PC, low- to mid-end laptop demand is likely to remain solid, while for graphic, demand will continue to see growth with the launch of new GPUs and gaming consoles.

“As for NAND, mobile demand is expected to rise on the back of improving consumer sentiment and demand from Chinese manufacturers. For server SSD, demand is likely to remain weak and prices are expected to decline as customers continue to adjust their inventory and manage their capex conservatively. However, demand for client SSD is expected to be robust as low- to mid-end laptop demand will remain solid,” read Samsung’s official statement.

It continued, “For the outlook next year, while geopolitical issues and the possibility of a prolonged impact from COVID-19 remain, mobile demand is expected to show solid growth until the first half as 5G continues to expand to low- and mid-end models. For servers, it is highly likely that demand will turn around in the first half as inventory levels normalize and investments by customers recover.”

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