Samsung said it is expecting a further decline in the semiconductor unit following its reveal of a massive 56 percent drop in operating profits during the third quarter of this year.
On its Thursday Q3 2019 report, Samsung Electronics revealed that operating profit was 56 percent down compared to the same period in 2018, but the figures are actually almost 18 percent higher than the second quarter, CNBC reported.
Furthermore, the tech giant revealed that is expecting semiconductor component demand to decrease further in the fourth quarter, while marketing expenses will most likely see a spike as smartphone sales rise during the holidays.
It is worth noting that this quarter is Samsung's fourth consecutive decline, igniting talks about the company's potential weakening amid tough competition and a global economic slowdown that could be weighing down on chipset consumption.
For the third quarter, the South Korean tech giant posted net profits of 6.29 trillion won. The amount is still remarkable but the figures are a far cry from 2018's Q3 net profits of 13.15 trillion won.
Amid increasing fears for the semiconductor sector, Samsung said it is expecting growth in 5G sales. There has been an apparent drive in 5G-related products as more consumers lean on faster internet speeds.
5G networks have been expanding in several countries around the world, spearheaded by Huawei. However, industry analysts believe Samsung will start its own journey towards high-speed projects and pose a challenge to the 5G leader.
Despite weak figures in its semiconductor business, the company saw significant improvements in its smartphone unit, as it posted an operating profit of 2.92 trillion won. CNN noted that the amount is a 32 percent hike from last year's records.
Industry experts pointed out that Samsung's solid numbers in its smartphone business are due in part to the current struggles that Chinese tech giant Huawei has been suffering from under the U.S. government.
Huawei was blacklisted by the White House, resulting in some interest to shift towards South Korea's electronic crown jewel. The ban pressured Google to restrict Huawei from using some of the former's most popular phone apps as well as its operating system.
Amid increasing interest for Samsung's flagships, the company still said it is expecting smartphone sales to start dwindling in the coming quarter due to increasing uncertainties in global markets and economies.
The company said in its newsroom that it will continue to capitalize on effective partnerships such as its collaboration with Microsoft. Aside from Microsoft, Samsung is also cooperating with Cisco to provide improved solutions for its mobile phones.
The firm was established in 1983 is among the leading competitors in the global tech circle.
