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Huawei bans hit Samsung

04.07.2019
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Huawei bans hit Samsung

DRAM also suffered a blow from Huawei on Samsung, whose average prices fell and were allowed to import raw materials from Japan. The firm’s profit could fall by more than half.

In the midst of the US-China trade war, Huawei, who was faced with the succession of Western technology companies, had revised new models and reduced the production of existing models. This move also affected Samsung.

Successive blows

Huawei is one of the major customers of Samsung, the world’s second largest chip manufacturer. The company generally supplies DRAM and NAND from Samsung. In the second quarter of the year, Huawei’s orders saw a sharp drop. This left Samsung in stock.

67 percent of the profit from the semiconductor part of Samsung, therefore by making a reduction in prices in the hands of trying to finish the stocks are expressed. Considering the recent drop in DRAM prices, Samsung is expected to suffer a major loss.

Last year, both DRAM prices and NAND prices were high, giving the company the chance to gain historical operating profit. Samsung’s operating profit of $ 12.7 billion in the second quarter last year is expected to fall by 60 percent to $ 5 billion in the same period this year. Samsung’s efforts to melt the stock of DRAM hands Micron’a said to open space.

Although the Galaxy S10 series sold about 12 percent better than last year, the decline in the chip segment was disappointing. Nevertheless, Samsung is expected to sell 37-40 million more smartphones due to the decline in Huawei’s smartphone market. In this case, there may be some increase in operating profit.

On the other hand, it will also be effective that Japan will require the permission to supply some important raw materials to South Korea. Samsung needs a 90-day period to obtain authorization, and this will be a disadvantage, especially in OLED production.

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