Samsung says memory chip market will recover this year: don’t rely on mobile phones for data centers

The spread of the new coronavirus outbreak will hurt sales of smartphones and consumer electronics this year, Samsung Electronics said Wednesday, according tomedia reports. At the same time, demand from the data center business will drive the recovery of the memory chip market. At Samsung Electronics’ annual general meeting in Seoul, chief executive Kim Ki-nam said the new coronavirus outbreak and the U.S.-China trade dispute had clouded Samsung Electronics’ prospects.

Samsung says memory chip market will recover this year: don't rely on mobile phones for data centers

Infographic (from: Samsung)

The company’s Galaxy smartphone is in fierce competition with Apple’s iPhone to grab a dominant position in the global smartphone market.

“The global smartphone market was expected to turn to growth this year, but it will shrink as the new coronavirus epidemic continues to spread,” Gao Dongzhen, president of the company’s mobile and networking business, said at the conference. However, demand for 5G smartphones is expected to rise. “

While the smartphone market will shrink, Mr Kim said demand in the chip market would grow this year after a sharp decline last year due to oversupply and trade tensions between the US and China. Half of Samsung Electronics’ profits come from its chip business.

Other chipmakers, such as Broadcom, have cut or cancelled their original sales targets because of business disruption caused by the outbreak of the new coronavirus. But Samsung Electronics said it expected companies in the data center business to invest and that new opportunities in areas such as 5G wireless networks and cars would drive chip sales growth in 2020.

At the same time, Mr Kim said chip supply would be constrained by expectations that chipmakers would focus this year on upgrading manufacturing processes rather than expanding capacity.

Kim Hyun-soo, head of consumer electronics at Samsung Electronics, said it was too early to predict what impact the new coronavirus outbreak would have on consumer spending.

“We had expected a slight increase in the consumer electronics market this year, but with the rapid spread of the new coronavirus outbreak, uncertainty is growing rapidly and it is difficult to predict the future,” he said. “