Do you know Samsung surprises market with profit warning

Samsung issued an unexpected profit warning, accusing the memory chip price plummet and the display panel demand slowing. This is the latest sign that technology companies are facing tougher times in the face of a global economic slowdown.

The Korean technology company’s warning is that Apple’s first warning of profit warnings since 2002 has shocked investors for two months, citing the “amplitude” of China’s economic slowdown.

A few days later, Samsung, the world's largest chip and smartphone maker, predicted that its operating profit for the first time in two years would fall for the first time in two years. It accused the weak sales of chips and smartphones in the fourth quarter of 2018, leading to “increased macro uncertainty”.

The market is still tough. On Tuesday, Samsung, which relies heavily on computer chips, said its first-quarter profit will be lower than expected. "The company expects the price of main memory chip products to fall more than expected."

Analysts warned that China's economic slowdown and US-China trade tensions have affected global electronics companies. The weak sales of smartphones and the decline in data-centric company orders such as Amazon and Google have led to oversupply of memory chips, which has caused prices to fall.

Samsung is also hit by poor demand for Apple's iPhone because it supplies display panels and chips. Apple is a competitor to smartphones and Samsung's largest customer.

Apple said in January that in the three months ended December 29, weak iPhone sales and China's economic recession reduced its revenue by 4.5% to $84.3 billion (£63.7 billion). Profits fell to $19.97 billion. Smartphone sales are also slowing as consumers now take longer to upgrade their phones.

Lee Won-sik, an analyst at Shinyoung Securities, told Reuters: "Due to the poor sales of Apple's iPhone, the inventory backlog of its memory chips and the weak performance of the display panel business are hurting Samsung's profitability."

Samsung expects to earn 7.2 trillion won (4.66 billion pounds) in operating profit from January to March, less than half of the 15.6 trillion won a year ago. Sales are expected to fall to 53.7 trillion won from 60.6 trillion won a year ago.

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