Samsung’s Weakest Operating Result Since 2009 Due to Struggle in Memory Chip Market

The electronics giant is struggling with a lead-heavy market for memory chips, and delivered its weakest operating result since the start of 2009.

This week is jam-packed with numbers released by major companies around the world, and in South Korea, Samsung presented its results for the first quarter on Thursday night.

Overall on the central stock exchanges in Asia and the Pacific region, the picture is mixed, and without the excessively large results.

This is what it looks like around 6 o’clock:

• The Nikkei 225 index in Tokyo falls 0.17 percent
• The Hang Seng in Hong Kong rises 0.08 percent
• The Shanghai Composite rises 0.20 percent
• Kospi in Seoul rises 0.12 percent
• The FTSE Straits Times in Singapore falls 0.46 percent
• The ASX 200 in Sydney falls 0.44 percent.

Weakest from Samsung in 14 years

The South Korean electronics manufacturer had an operating profit of 640 billion won in the first quarter, according to the recent quarterly report.

This corresponds to roughly five billion Norwegian kroner. The operating result is the worst for Samsung since the first quarter of 2009, writes CNBC. The result after tax of 1,400 billion won also came in somewhat lower than analysts expected, according to Bloomberg.

In addition to producing products such as smartphones and TVs, the production of memory chips for such products is a large part of Samsung’s businesses. The company supplies, among other things, to competitor Apple.

Memory chips are heavy

The market for these data chips is lead-heavy at the moment, with falling demand and lower prices for memory chips.

Samsung’s memory chip business had a large deficit of 4,580 billion won in the first quarter, corresponding to a loss of over NOK 36 billion.

Samsung shares are trading roughly flat on the Seoul Stock Exchange. The weak operating result had been announced earlier this month.

At the same time as the figures are released, Samsung states that they expect an improvement for the market later this year, according to Bloomberg. Samsung has previously announced cuts in memory chip production, but is still planning investments roughly at the same level as last year.