Global tech giant for consumer electronics Samsung Electronics Co. (005930) is set to announce its quarterly results for the period ended March 31 however it’s unclear whether the breakout of deadly coronavirus around the World will have impact on this upcoming quarterly reports and if yes by how much.
Samsung is the largest memory chipmaker around the world and also the number one seller of smartphones in terms of volumes. Its famous Galaxy smartphones always pose a very stiff competition against Apple Inc’s. (AAPL) IPhones.
According to estimates by Refinitiv, operating profit for Samsung in the first quarter of the year will be around 6.2 trillion won ($5.05 billion), a figure similar to what the company posted last year during the same period.
Despite Samsung warning that its first quarter results might be significantly affected by this pandemic due to slowing smartphones sales and consumer electronics in general, Refinitiv still holds onto its estimates for the company.
Head of research at Nomura in South Korea, CW Chung, is certain if the coronavirus pandemic goes on for prolonged period the memory chip industry will be affected significantly.
“If COVID-19 continues into 2H20, the memory market outlook could change for the worse,” said Chung.
Last year during the prolonged trade war between the world’s two largest economies i.e. U.S and China, both Apple and Samsung resulted to establishing new production plants in India and Vietnam since they couldn’t risk losing its Chinese market which was putting stiffer measures to foreign tech companies in the country.
China is the world’s largest consumer market for consumer electronics hence no producer in the industry would risk losing this market.
When coronavirus broke out in Wuhan city last year, things went from bad to worst so quick so fast that may companies including Samsung and Apple had to shut down their production bases in the country.