In its earnings report for the first quarter today, Samsung said it expects the COVID-19 pandemic to continue to affect its business for the rest of the year, cutting into revenue for smartphones and TVs but rising demand for PCs, servers and memory chips as people continue to work or research from home.
Samsung’s first-quarter results for 2020 were in line with the guidance issued earlier this month. Korean operating income was 6.45 trillion won (about $5.3 billion). Revenue dropped from the previous quarter to around 7.6 percent to 55.33 trillion won, owing to a seasonal decline in demand for displays and consumer electronics, and the pandemic effect.
The COVID-19 pandemic has resulted in more than 3 million worldwide reported cases and more than 217,000 deaths, resulting in shelter-in-place warnings in countries across the world and a global recession.
Samsung said as the effect of the pandemic remains unpredictable through the second half of 2020, it aims to make flexible investments and adjust its product mix to suit. Since it expects intensified competition among manufacturers as they attempt to rebound from a poor first half, Samsung said it will continue to introduce premium products such as a new foldable and Note apps, and extend 5 G to more mass-market smartphones.
Owing to poor seasonality and lower sales in China during COVID-19 shutdowns, Samsung’s display panel company saw a decrease in earnings during the first quarter, and expects demand to continue to be affected by the pandemic and postponement of major sporting events like the Summer Olympics.
On the other hand, as remote work, online education, online shopping and streaming entertainment services continue to put more demands on cloud providers and data centers, Samsung expects to see solid success in its memory business. As a result, Samsung will accelerate its transition to flash memory in 1Z-nm DRAM and 6th generation V-NAND.
Samsung also said it is aiming to counter store and plant closures worldwide through flexible supply networks, improve its online sales capabilities, and tailor promotions and logistics for various markets.