Samsung expects dismal Q3 earnings, could lose A9 chip orders
Things are looking far from rosy in Samsung-land. According to a Re/code report on Tuesday, the company’s third-quarter earnings are set to fall below market expectations — thanks to falling TV prices, decreased display shipments, and more competition than ever in the smartphone sector.
Although Samsung smartphones actually increased in number in terms of shipments, the operating margin was lower as the result of higher marketing costs, less demand for high-end phones, and a lower average selling price for handsets.
While still impressive on paper, Samsung’s operating profit of $3.8 billion for the quarter ending in September marks a massive decline of close to 60% from the same period in 2013. Overall sales dropped 20% to $44 billion.
That’s not the only bit of bad news for the company, either.
As per a separate report from Digitimes, Samsung is struggling to compete with rival chipmaker TSMC for orders of Apple’s next gen A9 processor. Although Samsung has offered lower-than-usual quotes to try and get the 2015 orders, it is apparently suffering problems with its yield rate for the 4nm FinFET process.
TSMC, meanwhile, is currently using its 20nm process to produce the A8 processors for the iPhone 6 and 6 Plus, and is confident that it will also pick up Apple’s order for the A9 processors.
While there’s no word on if Samsung plans to go to greater lengths to convince Apple to give it the A9 gig, on the smartphone front the company says it “cautiously expects” smartphone shipments to grow in the fourth quarter thanks to new smartphones.
What, like this one?