DRAM, LCD glut hits Samsung first quarter

Samsung Electronics saw sales and profits drop in the first three months of 2005 as the result of a memory chip and LCD glut.

Samsung Electronics saw sales and profits drop in the first three months of 2005 due to a glut of memory chips and flat-panel displays, the company said Friday.

Net profits at the Seoul company, which is the world's largest memory-chip manufacturer, fell by more than half to 1.5 trillion won (US$1.5 billion as of March 31, the last day of the period being reported) from 3.14 trillion won in the same period a year earlier. Revenue totaled 13.8 trillion won, down from 14.4 trillion won a year earlier, the company said.

The results are a sharp contrast from the first quarter of last year when Samsung reported a 50 percent rise in revenues and a 178 percent rise in profits.

At the heart of Samsung's memory chip problems is a global glut in DRAM chips, which are the main type of memory chip used in personal computers.

"The average first quarter spot price has fallen by 20 percent quarter-on-quarter following a continuing drop since mid-January," said Kim Il Ung, vice president of Samsung's semiconductor business, in a conference call with analysts.

The price has been dropping as a result of a continued switch by memory chip makers to larger wafers and more advanced production technology, both of which make it cheaper to produce chips, he said.

While this adds up to bad news for chip makers, it's good news for consumers. The average amount of memory fitted into new personal computers rose to 552M bytes in the quarter, up 8 percent for the last three months of last year, said Kim.

In the flat-panel display market, increased competition pushed down panel prices. As a result, Samsung's revenues in the business fell 20 percent and profits, which dropped 97 percent, were reduced to 10 billion won.

Samsung's telecommunications unit, which includes the company's cellular telephone business, saw sales that were virtually unchanged but profits dropped by a third despite rising demand for the company's phones. Samsung's shipments totaled 24.5 million handsets during the quarter and the company blamed increased competition for pushing down prices.

Join the newsletter!

Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Martyn Williams

IDG News Service
Show Comments



Sansai 6-Outlet Power Board + 4-Port USB Charging Station

Learn more >



Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles


PCW Evaluation Team

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Ratchada Dunn

Sharp PN-40TC1 Huddle Board

The Huddle Board’s built in program; Sharp Touch Viewing software allows us to easily manipulate and edit our documents (jpegs and PDFs) all at the same time on the dashboard.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?