If someone is benefiting the most from US sanctions on Huawei, nobody else but Samsung. Thanks to these sanctions, Samsung is “double profit” as growth in both the phone and chip segment is likely to help Samsung’s profit skyrocket 58% over the same period last year, a high rate. most in the last 2 years.
The smartphone segment’s profit is highest in 4 years
This is because while demand for Huawei phones in markets outside of China has plummeted, none other than Samsung is filling that void.
Europe, which was Huawei’s main market in the past, has now turned its back on the company over espionage allegations as well as sanctions from the US government. Not only that, the movement to boycott Chinese goods in India also brings new opportunities for Samsung, which is competing with Xiaomi and other Chinese smartphone brands in this market.
Tom Kang, an analyst at Counterpoint said: “Many consumers become hesitant to buy Huawei phones because they think Huawei may stop selling phones and services in the face of US controls.“He also added that, Samsung has increased the market share of mid-range and low-end phones.
These factors have helped Samsung’s smartphone business have the highest profitability in the past 4 years. In addition, the Covid-19 pandemic also spurred growth in the company’s home electronics segment as users were at home more and purchased more equipment, such as air purifiers.
Double benefit from the chip business
Not only profit from the smartphone business, after the US government changed its policy to completely block the supply of chips for Huawei in mid-September, the company had to rush to order more chips from Samsung to increase. reserves.
The dual impact from both businesses brought Samsung a huge operating profit of $ 10.6 billion in the third quarter (ending last September). This profit is much higher than the forecast of $ 10.08 billion by Refinitiv SmartEstimate. Sales also increased by more than 6% year-on-year, to 66 trillion Won.
Samsung will officially announce the details of the last quarter’s business results later this month.
Refer to Reuters