Executive with major smartphone manufacturer sees sluggish industry sales in 2019

Executive with major smartphone manufacturer sees sluggish industry sales in 2019
A tough year is ahead for Samsung's business of supplying smartphone manufacturers with components. That's the word from Samsung Chief Executive Kim Ki-nam, who made the comments Wednesday morning in South Korea (due to the time difference, it still is Tuesday here in the U.S.) during the company's annual stockholders' meeting. According to Reuters, the meeting is held to allow those holding Samsung stock to elect the members of the company's board.

The executive said that a weak smartphone market will eat into sales of memory chips and other components that it sells to other manufacturers. The company has already started mass production of its 12GB Random Access Memory (RAM) chip which is being employed on its top-of-the-line version of the Galaxy S10+. With many high-end handsets making the move to 8GB of RAM this year, we should see more employ Samsung's component in 2020-2021.

The company expects to continue making investments in semiconductor manufacturing as it faces tough competition from TSMC. Last October, Samsung started mass-producing chips using the 7nm process using with its extreme ultraviolet (EUV) lithography. This makes laying out the design of the chip more precise. And that is important because at 7nm, more transistors are stuffed into each chip. This increases its performance and decreases energy consumption compared to previous-generation chips.

As we told you earlier today, a benchmark test revealed that Motorola plans on using Samsung's Exynos 9610 chipset to power its upcoming Motorola One Vision handset. Normally, this phone might feature a Qualcomm Snapdragon SoC under the hood, but it looks like the Lenovo unit is testing out chipsets sourced from Samsung instead. This is the same chip that is found on Samsung's new Galaxy A50 handset.

With its component business struggling, Samsung is looking to produce networking equipment gear, a highly competitive business. The number one player in that industry is Huawei and other top names include Nokia, Ericsson and ZTE. With the U.S. recommending to allies that they refrain from using Huawei's gear because of spying concerns, Samsung could take advantage of any business that opens up as a result of the warnings.

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