Samsung Predicts Disappointing Results as Chip Prices Fall

Samsung Predicts Disappointing Results as Chip Prices Fall

Samsung Electronics warned on Tuesday that it would report disappointing financial results thanks to slumping prices for chips and LCD screens, in another sign of slowing demand for smartphones and other gadgets.

The South Korean electronics giant said it was anticipating a “widening price fall among major products” for the first three months of the year amid “weakening overall demand” for its products. The disclosure was unusual for Samsung, which typically offers a forecast of its financial performance shortly after the end of its quarterly period.

The announcement from one of the workhorses of the consumer electronics industry is the latest indication of waning global demand for sophisticated tech products. It comes against the backdrop of a 7 percent decline in smartphone shipments globally during the fourth quarter of 2018, the fifth quarterly decline, according to an analysis by the Hong Kong-based research firm Counterpoint.

The change, in part, comes as consumers hold on to their smartphones longer, unconvinced of the need to upgrade to new models that offer only incremental technological improvements.

In its statement Tuesday, Samsung said it would seek to boost competitiveness by offering more technologically sophisticated products, indicating it would seek to counter the flood of Chinese components into global markets with higher-quality offerings.

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