haven’t materialized as quickly as envisioned,
IHS Markit analyst Les Jelinek said.
Supply and demand “just went in completely
opposite directions, and the bottom kind of fell
out,” Jelinek said. “When you look at 2019, there
wasn’t a bright spot for the industry.”
Worldwide chip revenue is projected to decrease
13% this year to $423 billion, down from $485
billion last year, according to IHS Markit.
President Donald Trump’s ongoing trade war
with China also has caused market upheaval, but
the fallout mostly has affected U.S. chipmakers
that usually sell a lot of processors to Chinese
companies, particularly Huawei — a major
target of the administration’s sanctions.
The adverse market conditions are the main
reason Samsung expects its operating profit
for the July-September quarter to fall 56% from
the same time last year to $7.7 trillion won ($6.4
billion). The South Korean company says its
third-quarter revenue likely rose 5% from last
year to 62 trillion won ($52 billion).
Analysts say Samsung’s sales during the third
quarter should have been boosted by the
launch of its Galaxy Note 10 smartphone and an
improvement in display shipments driven by the
release of new devices by Apple.
Samsung did not provide a detailed account of
its performance by division. It will provide that
breakdown when it releases its full third-quarter
report later this month.
Conditions are expected to improve next year
as the shift to the next generation of ultrafast
wireless connections, known as 5G, rekindles
demand for chips in networking equipment,
compatible smartphones and other devices.
IHS Markit expects industrywide chip revenue to
bounce back slightly next year, to $448 billion.
Image: Lee Jin-man
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