Huawei cut down memory chip orders, causing Samsung to damage sales. However, they were compensated by Apple because they did not import enough OLED screens.
According to reports recently announced, Samsung Electronics’ expected profit in the second quarter of 2019 will fall 56% compared to the same period in 2018, down to 5.56 billion USD. Revenue is also expected to fall 4% to $ 47.89 billion.
This is the lowest profit that Samsung has achieved since the third quarter of 2016, after the Korean giant had a problem with the Galaxy Note 7. According to analysts, the main reason comes from the ban with respect to Huawei.
Huawei is currently the world’s second largest smartphone manufacturer. At the same time, the Chinese technology giant is also a big customer buying DRAM and NAND memory chips from Samsung.
After the embargo, Huawei was forced to cut output sales. Therefore, orders for memory chips from Samsung have also been cut, adversely affecting its revenue.
“The loss of a large customer like Huawei will force Samsung to reduce the price of memory chips in the future,” said analyst Jay Kim at Sangsangin Investment.
In fact, it also benefited in part from the ban on Huawei. Chinese companies are expected to reduce about 40% of the machines sold this year. However, according to Reuters, the mobile market is becoming saturated, making it difficult for the Korean giant to recover.
In return, the situation can be saved by Apple. According to Reuters, US technology company may have to compensate Samsung about 684 million dollars because it did not buy enough OLED screens as agreed. The money could help the Korean company offset part of the revenue lost by Huawei.