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Seoul (pte020/18.04.2003/13:34) - The south Korean electronics company Samsung Electronics http://www.samsungelectronics.com, the world's largest manufacturer of memory chips recorded a 41 per cent net profit drop in the first quarter, that is from 1.46b euro to 862m euro. Despite it s sharp decline in revenue the company is still one of the few profitable manufacturers in memory chips.
Samsung, whose business in mobile-phone-handset manufacturing is still making profits, predicts an uncertain future in the flagging business IT sector. Competition companies such as Hynix and Micron, probably also Infineon, are currently earning no money with DRAM-chips.
The reason for the decline in profit is sited in both weak PC sales and falling chip prices. Samsung was forced to continually lower its chip prices during the last quarter due to the weakened economy.
In the production of mobile phones Samsung, the third largest producer worldwide, is ahead of Siemens, yet the solid competition forced a lowering of mobile phone prices to 5 per cent.
The second-quarter outlook is not that much better. In a conference call the vice president of Samsung Investor Relations Chu Woo Sik spoke of a "gloomy forecast".
Plans are underway to build a sixth production plant for thin film transistor (TFT) LCDs, which is meant to boost long-term profit margins.
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