Business

Samsung net profits down 31% in fourth quarter

SEOUL: Samsung Electronics, the world's biggest smartphone and memory chip maker, reported a slump in fourth-quarter net profits yesterday, blaming a drop in demand for its key products.

Net profits in the October-December period were 8.46 trillion won (S$10.2 billion), it said, down 31 per cent year-on-year.

The company is the flagship subsidiary of the giant Samsung Group, and it is crucial to South Korea's economic health.

Chip prices have been falling as global supply increases and demand weakens.

The company also has to contend with increasingly tough competition in the smartphone market from Chinese rivals like Huawei offering quality devices at lower prices.

"Unfavourable business and macroeconomic factors led to slower performance in the final quarter," Samsung Electronics said in a statement, when "earnings were affected by a drop in demand for memory chips".

It expected demand for chips to stay weak in the January-March period, "due to seasonality and macroeconomic uncertainties".

Weakening overseas demand for memory chips - one of South Korea's key trade items - is bad news for its export-driven economy.

Bank of Korea governor Lee Ju Yeol said earlier this month that Asia's fourth largest economy could face a "considerable burden if the prolonged downturn continues in the semiconductor industry". - AFP

BUSINESS & FINANCE