Korea’s biggest electronics manufacturer blamed a slump in demand for smartphone handsets, memory chips and screen displays for the reduced profit forecast
Korean tech giant Samsung has issued a surprise profit warning, as declining handset sales hit the company’s bottom line, according to reports in the UK press.
The company also blamed a slump in the memory chip market for the drop in profits. Samsung has also been hit by a fall in demand for Apple’s iPhone, which use Samsung chips and display screens.
“The company expects the scope of price declines in main memory chip products to be larger than expected,” the company said in a bourse filing.
Late last year, Samsung announced that it intended to close its largest manufacturing plant in China, the Tianjin facility, following months of speculation.
The world’s biggest smartphone producer announced the closure following increased production costs and a fall in sales in China. Last year Samsung produced 36 million smartphone handsets at its Tianjin facility, around 15 per cent of its total global production.
"As part of ongoing efforts to enhance efficiency in our production facilities, Samsung Electronics has arrived at the difficult decision to cease operations of Tianjin Samsung Electronics Telecommunication (TSTC),” a Samsung spokesperson told journalists at the South China Morning Post.
Samsung Electronics’ share price fell on news of the profit warning, dropping from 46.550 KRW to 45.250 KRW on Tuesday.