Technology

Intel woes provide timely lesson for Samsung, Technology

Fri, Jan 08, 2021 – 10:41 AM

[HONG KONG] Intel’s troubles right this moment might be Samsung’s tomorrow. The South Korean big is ending 2020 on a powerful observe, thanks largely to its dominance in reminiscence chips. Its US peer, against this, has fallen behind and faces calls from a pushy investor to interrupt up. A chronic management vacuum at Samsung threatens an identical gradual decline.

The US$511 billion expertise conglomerate expects working revenue for the three months to December will likely be US$8.2 billion, barely under estimates collected in a Refinitiv ballot. Detailed outcomes are due later within the month, however an appreciating received towards the US greenback might be accountable. Smartphone gross sales additionally might have disillusioned amid competitors from Apple’s iPhone 12.

Even so, costs for reminiscence chips, Samsung’s principal revenue driver, are displaying indicators of a restoration, helped by industry-wide provide cuts and bettering server demand. After rallying by some 50 per cent over the previous six months, the corporate’s shares now commerce at a file excessive on again of an anticipated restoration.

This upbeat outlook, nevertheless, is a far cry from Intel’s. For many years, the chipmaker was on the forefront of churning out microprocessors that powered PCs and laptops earlier than squandering its technological and manufacturing edge in cellular.

Now activist hedge fund Third Level is pushing for a shakeup on the US$214 billion firm, warning that Intel not solely “misplaced its pole place” in chipmaking to Samsung and Taiwan Semiconductor Manufacturing, however has allowed smaller and nimbler outfits similar to Superior Micro Units and Nvidia to take market share and dominate new areas.

Samsung’s de facto chief, Jay Y Lee, could be sensible take observe. The third-generation inheritor has been embroiled in a corruption scandal since 2017 and faces a nine-year jail time period for bribery and different costs, with a courtroom set to rule later this month. Whereas he has largely stepped again from day-to-day administration, he oversees the general strategic course. The corporate has stayed on the side-lines in autonomous driving and synthetic intelligence, at the same time as compatriot Hyundai Motor steps up acquisitions and investments in such fields. The hazard for Samsung is that there is now some Intel inside.

Samsung Electronics stated on Jan 8 that it expects income within the three months to December to be 61 trillion received (S$73.76 billion), a rise of 1.9 per cent from a yr earlier.

Working revenue doubtless rose 26 per cent from the fourth quarter of 2019 to 9 trillion received, the South Korean firm stated. It plans to launch detailed outcomes on the finish of January.

A last verdict within the bribery and corruption trial of Samsung Electronics vicechairman Mr Lee is scheduled for Jan 18. Prosecutors are in search of a nine-year jail time period.

REUTERS



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