Net profit plummeted 40% Samsung warned that the technology industry "cold winter" has arrived

Affected by the global economic situation, market oversaturation and oil price plunging, Samsung's fourth-quarter net profit plummeted 40%. In this regard, following Apple's CEOTim Cook, Samsung Mobile President Lee Kyeong-tae also warned that the global technology giant will enter the "winter" this year.

According to Samsung’s earnings report released on Thursday morning, Samsung’s fourth-quarter net profit plummeted 39% to 3.24 trillion won ($2.7 billion), far less than Bloomberg’s forecast of 5.4 trillion won. Among them, Samsung’s non-operating losses amounted to 2.5 trillion won due to declining expenses, strong South Korean won, and poor sales growth of smartphones and mobile phone chips.

In a statement issued by Samsung, Samsung pointed out that due to the slowdown in the growth of the mobile phone industry and the reduction in demand for information technology products, the already fierce competition in the industry will further intensify. At present, Samsung has lost the pricing power of memory chips. The chip industry was oversaturated and chip prices fell sharply. The Samsung core business suffered heavy losses, resulting in the fourth quarter of memory chip sales profit is only half of the third quarter.

In order to resist the industry's "cold winter", Samsung will improve its performance by reducing costs and product diversification. Among them, foldable display and new semiconductor technology will become the focus of investment. Among them, Lee Kyeong Tae, deputy director of Samsung's mobile communications department, said that although the competition in the smart phone industry will be fierce, there will be growth in the low-end products sector, so we will introduce some new mobile phone products to enhance our competitive advantage. .

According to research strategists, global smartphone shipments increased by only 6% in the fourth quarter of 2015, falling to a record low. And by the extrusion of Apple, Xiaomi and Huawei, Samsung smartphone shipments fell for the second consecutive year. According to Lee Ka-keun, an analyst at KB Investment Securities in Seoul, according to the current situation, Samsung's performance is expected to be lowered in the future.

Peng Bo quoted East Securities analyst Yoo Eui Hyung as saying that all technology companies in the world will enter the "severe winter" this year. Unless the overall demand improves, these technology companies should not consider how to compete with competitors. It is necessary to consider how to protect yourself. Since the demand for mobile phones will not increase, the performance of major technology companies depends mainly on the sales of memory chips and displays.

Wall Street has reported that Apple reported its first-quarter earnings after the close of trading on Tuesday. The first-quarter revenue and net profit growth both reached new highs, but the profit growth of the iPhone dropped to a record low. CEO Tim Cook said that the global economy has experienced unprecedented extremes. Apple's performance was affected by factors such as a stronger US dollar exchange rate, slower economic growth in various countries, a sharp fall in commodity prices, and continued currency depreciation.

Affected by the poor performance of Apple and Samsung, after the stock price of Apple fell 6.6%, the shares of TDK Mobile Communications, Murata Manufacturing Co., LG and other companies also fell. So far this year, Samsung's share price has fallen more than 9%, while South Korea's Seoul KLCI is only down 3,2%. Samsung shares fell further by 2.6% this morning.