Samsung provided the latest sign of the tough
times afflicting computer chipmakers as it
braced investors for a sharp drop in profit.
The sobering forecast this week wasn’t entirely
unexpected, given an industrywide glut that
has forced chipmakers to slash prices to clear
out inventory.
Although Samsung also makes smartphones
and an array of other devices, it also is among
the world’s largest chip suppliers.
Chipmakers are suffering the consequences
from misreading industry demand for their
products. The industry invested heavily in
2016 and 2017 to ramp up production in
anticipation of being flooded with orders for
chips used in smartphones, internet-connected
cars and other products.
Instead, smartphone sales have been dwindling
as a lack of innovation and rising prices have
caused consumers to hold on to their existing
devices for longer periods. Automakers also
haven’t been ordering as many chips as
anticipated, and expected breakthroughs in
artificial intelligence, robotics and virtual reality
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