Samsung Electronics logged 62 trillion won in third quarter consolidated quarterly revenue and 7.78 trillion won in quarterly operating profit, according to financial results ending Sept. 30 announced by the electronics giant.

 Third quarter profit fell sharply from a year earlier, but improved from the previous quarter, as stronger smartphone sales and improved utilization in mobile OLED screens were weighed down by continued weakness in the memory chip market.

Both the U.S. dollar and euro strengthened against the Korean won, resulting in about 0.4 trillion won in positive effects toward quarterly operating profit, mainly in the component business.

Earnings from the memory business slumped significantly year-on-year as memory chip prices continued its downward trend amid the industry-wide weakness since the end of 2018.

The logic chip business saw demand rise for image sensors and display driver ICs (DDIs), but also suffered from price declines in mobile application processors (APs).

The display panel business saw profit from mobile displays increase YoY with solid sales of OLED screens, improved capacity utilization and reduced costs. However, losses continued in the large panel business due to ongoing capacity expansions in the broader industry.

In the Mobile Business Division, strong sales of the Galaxy Note 10 and A series boosted profit, along with improved margins for mass-market models. The business also expanded its 5G product offerings and launched the Galaxy Fold. Meanwhile, the Network Business reported higher earnings YoY on growing commercialization of 5G service in Korea.

The consumer Electronics Division posted a YoY decline in profit from the TV business amid pricing pressure from intensifying competition, despite growing shipment of premium models such as QLED and ultra-large size TVs. Earnings from home appliances rose on increased sales of premium products.

Looking ahead to the fourth quarter, the company expects demand for components to turn sluggish in general amid weak seasonal effects, while marketing expenses are likely to increase to address year-end smartphone sales.

Memory chip demand is seen rising slightly quarter-on-quarter on the back of inventory building by customers in response to global macroeconomic uncertainties.

Mobile displays will likely report weaker results in the fourth quarter, as demand falls short of initial expectations for certain premium smartphones and costs increase due to lower utilization in some production lines. Large panel prices are also likely to continue declining.

The company expects fourth-quarter earnings in the mobile business to decrease quarter-on-quarter as marketing costs are set to rise and shipments to decline slightly, with flagship model sales weakening from their post-launch peaks.

The consumer electronics division will likely log stronger earnings helped by year-end seasonal demand.

For 2020, Samsung expects growing sales in 5G products and foldable devices; the logic chip business is forecast to report accelerated growth as it expands mass production of next-generation extreme ultraviolet lithography (EUV) based products.

However, uncertainties linger over the memory chip market as demand is seen recovering but risks from global industry circumstances persist.

As Samsung plans to manage investment and capacity operation flexibly depending on market conditions, DRAM inventory is expected to normalize in the first half of 2020. The company also remains committed to investments to meet demand in the mid-to-long term.

The system LSI business will introduce differentiated 5G system-on-chip products and high-resolution sensors, while the Foundry Business will seek to diversify its client base and expand production from the 5nm and 7nm EUV processes.

In displays, Samsung plans to leverage its leadership in mobile screens, offering power-efficient and slimmer products to capture demand from 5G and other premium products.

It will also transform its large panel business to focus on quantum-dot (QD) displays, with the existing LCD business addressing value-added products such as ultra-large and 8K TVs as well as high-end monitors.

Samsung Electronics, 50 yrs, Braces for Upcoming 50 Yrs.

Samsung Electronics celebrated the 50th anniversary at “Samsung Digital City’ in Gyeonggi-do on Nov. 1. Among about 400 executives and staffers on hand at the event were CEO and Vice Chairman Kim Ki-nam, President Kim Kyeon-suk, and President Koh Dong-jin.

In his anniversary video message, Samsung Electronics Vice Chairman Lee Jay-yong gave words of encourage over dedication and efforts executives and staffers have sweated for the past 50 years and stressed preparing for the upcoming 50 years and inheriting a centennial company to the future generation.

“Fifty years until now are possible with all your dedication and efforts,” Vice Chairman Lee said. He gave words of encouragement for Samsung Electronics’ achievements of rising to an unrivalled company.