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Samsung Highlights chip Recovery, Contracting Phone Industry amid Coronavirus Pandemic

Samsung Highlights chip Recovery, Contracting Phone Industry amid Coronavirus Pandemic

Samsung Electronics stated Wednesday the coronavirus pandemic would hurt sales of smartphones and consumer electronics this year, while demand from data facilities would fuel a recovery in reminiscence chip markets.

Samsung Highlights chip Recovery, Contracting Phone Industry amid Coronavirus Pandemic

CEO Kim Ki-Nam stated the coronavirus and U.S.-China trade wars were casting a shadow over the outlook for the South Korean tech titan, whose Galaxy smartphones vie with Apple’s iPhones for global dominance.

While the smartphone market would contract, Kim stated the chip sector – which covers about half of Samsung’s operating revenue – would see demand growth after a drop in 2019 exacerbated by excess supply and U.S.-China trade spats.

Other chip manufacturers like Broadcom have either cut or pulled their sales scope due to disruptions triggered by the coronavirus pandemic; however, global chief Samsung stated it anticipated investments from data center companies and new opportunities in areas resembling 5G wireless networks and vehicles to drive chip sales higher this year.

At the same time, Kim stated he anticipated chip manufacturers to focus on upgrading manufacturing processes instead of increasing capacity this year, limiting supply.

Samsung Electronics shares were up 0.6% versus a 0.5% drop in the broader market.

Samsung’s annual general assembly drew a crowd of only some 400 shareholders in 2020, sharply down from about 1,000 in 2019, as South Korea battles the biggest coronavirus pandemic in Asia outside China.