Samsung Electronics Co. warned earnings in the current quarter will decline, saying the strong growth in its mobile and memory business that helped third-quarter profits will ease amid intensifying competition and weakening demand.
The world’s largest maker of memory chips and personal electronics said net income rose a better-than-expected 52% to 9.27 trillion won ($8.2 billion) in the three months ended September, beating the 7.54 trillion won average of estimates. Samsung foresees capital spending of about 35.2 trillion won this year because of a migration to more advanced chip processes and a buildout of its contract chipmaking business.
The South Korean technology giant’s tepid outlook may fuel concern that the remarkable tech sector rally during the pandemic may have run its course. The company joined fellow chipmakers Micron Technology Inc. and Intel Corp. in warning that demand from server customers will weaken amid an inventory correction. Samsung also forecast rising competition in mobile phones and consumer electronics and said it will have to boost spending on marketing.