|Bid||50,200.00 x 0|
|Ask||50,300.00 x 0|
|Day's Range||49,800.00 - 50,400.00|
|52 Week Range||36,850.00 - 50,900.00|
|Beta (3Y Monthly)||1.18|
|PE Ratio (TTM)||N/A|
|Earnings Date||Oct. 31, 2019|
|Forward Dividend & Yield||1,416.00 (2.84%)|
|1y Target Est||54,903.00|
(Bloomberg) -- Japan Display Inc., the struggling supplier of mobile screens to Apple Inc., says it has about a year before it needs to decide on whether to take a plunge on next-generation organic light-emitting diode displays.While OLED panels are slimmer, more energy-efficient and offer higher contrast, JDI’s liquid crystal displays will retain a price advantage that keeps them competitive in smartphones through 2021, the company’s new Chief Executive Officer Minoru Kikuoka said in an interview. He anticipates a more decisive shift to the new technology may occur in that time period, declining to elaborate on plans of specific customers.When Apple launched its first OLED iPhone in 2017, it was seen as the beginning of the end for the LCD’s long reign. For Japan Display, which relies on Apple for a large portion of its revenue, that spelled trouble because the company was falling behind in the development of the new screens. But the iPhone X, which used an OLED display from Samsung Electronics Co., didn’t sell as well as anticipated, and Apple followed up a year later with an LCD-based addition to its lineup with the iPhone XR -- giving the Japanese company some breathing room.Samsung Is Pouring $11 Billion Into Next-Generation DisplaysWith the smartphone market plateauing and fancier screens failing to ratchet up demand from users already content with their existing devices, value for money has once again risen in importance for people considering a new purchase, according to the CEO.“We are seeing consumers put more emphasis on affordability when it comes to their smartphone preferences,” Kikuoka said. “The industry is now gaining a new appreciation for the kind of price competitiveness offered by the LCDs.”Apple’s 2019 phone lineup includes one LCD model -- the iPhone 11, which Apple launched at a starting price $50 lower than its predecessor -- and the company plans to add a second one in the first half of next year to replace the aging iPhone 8. But the Cupertino, California-based company may still shift entirely to OLED for new phones as early as 2020. Though it will still sell a number of older LCD models, the time for Japan Display is running out.After repeatedly pushing back mass production of its own OLED screens, JDI is finally close to having its first OLED product, Kikuoka said, declining to give further details other than to say that it won’t be a smartphone screen. A person familiar with the matter confirmed an earlier report that JDI’s first OLED will be used in the Apple Watch. Still, competing in the mobile phone arena would take billions of dollars in additional investment, money that Japan Display doesn’t have.Apple Supplier JDI Plunges After Warning It May Not Survive“There was a time when we felt the need to rush a shift to OLED,” Kikuoka said. “Without a partner who could pitch in on the capital side, we simply can’t do it.”Constituted from the remains of numerous ailing Japanese display makers in 2012, JDI mistimed large investments in LCD capacity and found itself struggling against abler competition from South Korean and Chinese rivals. Five straight years of losses have sent it in search of a capital infusion from overseas, but the list of potential suitors has continued to dwindle. When Kikuoka took the helm in September, the company had just reached a new low, warning that if it’s not able to raise fresh capital it may face difficulties continuing its business.Japan Display said last month that it lost another potential investor as China’s Harvest Tech Investment Management Co. withdrew from its rescue plan. That was the latest blow since June, when Cosgrove Global Ltd., Topnotch Corporate Ltd. and Taiwan’s TPK Holding Co. left a consortium that in April agreed to an infusion of 117 billion yen ($1.1 billion). JDI still expects to receive an investment from Oasis Management Co. and aims to raise a total of 50 billion yen by the end of the year. An unnamed customer that had previously been reported to be Apple may put in $200 million.Chinese screen makers BOE Technology Group Co. and Tianma Microelectronics Co. had also shown interest in JDI’s OLED technology, but both have since focused on developing their own versions. Having an actual track record of mass-producing OLED panels might bring those companies back to the table in the future, Kikuoka said. A joint venture at Japan Display’s Hakusan plant in central Japan would be the easiest route, but exporting its manufacturing know-how to China is also an option, he said. JDI could furthermore be open to offers from private equity and other sources of financing.Kikuoka, 57, spent the first part of his career in finance with stints in Industrial Bank of Japan Ltd. and Merrill Lynch. After more than a decade at electronics parts and materials suppliers Nitto Denko Corp. and Nidec Corp., he joined Japan Display’s finance division in 2017. He was named chief financial officer in May before advancing to the top post last month.In August, Japan Display reported quarterly sales at the lowest level since the company went public in 2014, as demand from smartphone makers cratered with no prospects of recovery in the near future. The company has shed about 1,200 employees through a voluntary retirement plan, sold off some display manufacturing equipment and suspended production at one plant.Over-investing in factories at the peak of the demand cycle is only one of the causes for JDI’s current dire straits, according to Kikuoka. The company also fell victim to complacency because it was backed by Innovation Network Corp. of Japan, a state-owned fund that remains JDI’s largest shareholder.“That resulted in a culture that allowed losses to continue and a sense that someone would always come to our rescue,” he said. “What was missing was a real hunger to strive.”\--With assistance from Mark Gurman.To contact the reporters on this story: Pavel Alpeyev in Tokyo at firstname.lastname@example.org;Yuki Furukawa in Tokyo at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Vlad Savov, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- In its desperation to create more tech stars, South Korea’s government bears some of the blame for spreading moral hazard in the nascent local hedge-fund industry.Lime Asset Management Co., the country’s biggest hedge fund, has frozen $710 million in withdrawals and come under regulatory investigation while struggling to meet redemptions in a dangerously too-good-to-fail form of convertible bonds aimed at boosting tech startups. The government encouraged Lime and other funds to load up with such instruments, but they have found it extremely difficult to exit when a surge of investors have tried to pull out their money.Convertible bonds are popular in volatile sectors like tech for investors looking for the safety of fixed income and interest as well as the benefits of an equity upside. Witness the clamor early this year in China for convertibles. So hot was demand as the stock market surged that regulators took steps to cool the frenzy, including preventing their purchase through multiple accounts. The problem in South Korea is that high volumes of convertibles kept being issued while the Kosdaq index of mainly small-cap technology stocks has fallen. That's because these bonds have a uniquely Korean flavor — an incentive in the form of refixing clauses that allows an investor to negotiate a lower equity strike price whenever shares fall.This ability to keep lowering the equity conversion price as markets tank meant that hedge funds faced little risk in buying them. The phenomenon “posed a serious moral hazard problem — I think South Korea is the only country that allows this kind of refixing,” said Bruce W. Lee, chairman of an environmental, social and corporate governance research firm, Who’s Good. As if that wasn't attractive enough, the government gave tax breaks for investments in Kosdaq stock and convertibles. No wonder funds piled in. The government was effectively incentivizing the hedge-fund industry to foster new blood in technology. Asia’s fourth-largest economy has struggled to nurture entrepreneurship in the smothering shadow of such giants as Samsung Electronics Co. The top 10 family-run conglomerates control more than a quarter of all business assets. It isn’t surprising that South Korea has just nine unicorns, or privately held startups worth more than $1 billion, CBI Insights data show. The biggest and best-known, e-commerce company Coupang, has some backers like SoftBank Group Corp.’s Vision Fund and was last valued at $9 billion.Lime set up its hedge funds in 2015, when Seoul eased license restrictions in the industry and opened the door to a wider swathe of retail investors. The changes enabled a high-net-worth individual to subscribe if he or she had 100 million won ($85,000) to invest, down from 500 million won previously. But investors have been souring on South Korean funds since late 2017. Equities have been hammered by the trade war with the U.S. and returns in hedge funds have lagged behind global peers. Investors pulled about 400 billion won from hedge funds in September, the first net outflow this year, according to NH Investment & Securities Co. With Lime struggling, the country’s financial watchdog is on the alert to prevent contagion. Seoul’s encouragement of investment in the tech industry is understandable. But in allowing a fiasco of not-really-low-risk convertibles to undermine its hedge funds, the day when the necessary risk-taking can launch a real startup culture may have been set back.To contact the author of this story: Nisha Gopalan at email@example.comTo contact the editor responsible for this story: Patrick McDowell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- Samsung Electronics Co. said it will issue a software update early next week to address a major security vulnerability that’s emerged on the company’s flagship Galaxy smartphones, the latest technological mishap for the world’s largest smartphone maker.Consumers noticed in recent days that Samsung’s in-screen ultrasonic fingerprint scanner -- used to unlock the company’s latest Galaxy S10 and Note 10 models, as well as to authenticate payments on those devices -- can be fooled with unregistered fingerprints and a third-party silicone screen protector. After an initial report in the British tabloid The Sun, concern mounted about the potential scale of this security breach, which could make Galaxy users’ personal data and mobile wallets vulnerable to abuse.In a statement, Samsung advises that all users should remove any silicone screen protectors from their devices, delete and re-enroll their fingerprints and wait for the software update to arrive.When it was introduced as a major feature on the Galaxy S10, the ultrasonic fingerprint scanner technology was described by Samsung as “invisible yet vault-like security.” By partnering with Qualcomm Inc., Samsung provides the biometric security using sound waves to read the valleys and ridges of a finger’s surface.This is not the first time that Samsung’s flagship mobile devices have been caught up in a significant technological problem. In 2016, the Galaxy Note 7 turned out to be susceptible to catching fire spontaneously and even exploding in extreme cases, costing Samsung $5 billion in recall costs, consumer compensation and class-action lawsuits worldwide. More recently, in another screen problem, Galaxy Fold review models had a protective sheet that appeared like a screen protector and was mistakenly removed by testers, creating another headache for the company and forcing it to redesign the device.To contact the reporter on this story: Sohee Kim in Seoul at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Vlad Savov, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg Opinion) -- Apple Inc.’s suppliers have walked a tightrope for a long time.They try very hard to get their products into the iPhone because it can mean a massive increase in sales. But they must proceed with care, as doing so risks yoking their business to the whims of the Silicon Valley giant’s famously capricious supply chain operations. When iPhone sales stutter, Apple reacts by trying to squeeze even lower prices out of suppliers. Worse, it starts to make the components itself.That’s why it looked like horrible news for Dialog Semiconductor Plc when it became clear two years ago that Apple was going to produce its own power-management chips (which regulate how energy is distributed around a device) for its iPhone, rather than buying them from the British tech company. But Dialog has managed the transition well. The stock has risen more than three-fold from a 2018 low.Adding to the ignominy at the time, Apple paid what looked like a bargain $300 million last October to take on 300 of Dialog’s engineers, and pledged a further $300 million to buy Dialog components over three years to help its transition out of the iPhone supplier stable. A year later, though, and the terms of that deal look like a canny piece of business for Dialog’s chief executive officer Jalal Bagherli.While Dialog would no doubt have preferred to retain the status quo, where 75% of its revenue came from Apple (almost all from iPhone components), that made it particularly vulnerable to being squeezed on prices.The share price recovery this year has only brought Dialog back to where it was before Apple’s decision to drop it as an iPhone supplier. But it secured three years of guaranteed revenue, without the cost of employing the engineers responsible for generating much of it (since they’ve now joined Apple).The British company is pivoting meanwhile to supply consumer and industrial products with a healthier growth trajectory than the iPhone, such as Apple’s AirPods and Macs. Yes, they’re still Apple products but there’s less pressure on supplier margins. Plus Dialog wants Apple to account for less than 40% of its revenue by 2022.This does all point too to a softening by Apple toward its suppliers, particularly those making components not easily found elsewhere. In July, Bloomberg News reported that it had pledged $100 million to keep afloat the troubled Japan Display Inc., a maker of iPhone screens. That followed an $850 million payment to Samsung Electronics Co. to make up for a shortfall in purchases of organic light-emitting diode displays.The driver of Apple’s changed behavior is surely the fierce competition in smartphones, where its market share has declined. The company’s ability to strong-arm suppliers into giving it better terms in return for stratospheric sales growth is therefore waning. If Apple’s going to retain access to cutting-edge components, suppliers must know they won’t be cut adrift.To contact the author of this story: Alex Webb at email@example.comTo contact the editor responsible for this story: James Boxell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Alex Webb is a Bloomberg Opinion columnist covering Europe's technology, media and communications industries. He previously covered Apple and other technology companies for Bloomberg News in San Francisco.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
(Bloomberg) -- ASML Holding NV forecast fourth-quarter sales ahead of analysts’ expectations, as Europe’s largest semiconductor equipment maker won orders for 23 more of its newest lithography machines.The Netherlands-based company, which has a monopoly on extreme ultraviolet-lithography equipment, predicts sales of 3.9 billion euros ($4.3 billion) for the fourth quarter, compared with an average estimate of 3.87 billion euros. A year earlier, ASML reported sales of 3.14 billion euros over that quarter.Shares of ASML fell as much as 2.1%. The shares has surged 77% so far this year through Tuesday, making ASML the fourth Dutch company with a market value of more than a 100 billion euros.Key InsightsASML, an important supplier to chip makers including Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co., forecasts a gross margin of about 48% to 49% in the fourth quarter of the year, matching the average estimate for 48.8%.The 23 EUV orders in the third quarter contributed to the highest-ever value of bookings in one quarter, said Chief Executive Officer Peter Wennink. “This strong order flow confirms the adoption of EUV in high volume manufacturing for Logic and Memory.”Wennink added he expects the Logic business to continue to be strong, driven by the leading-edge nodes supporting end-market technology and applications such as 5G and artificial intelligence, while the timing of the memory industry’s recovery remains uncertain.ASML locked in bookings worth of 5.1 billion euros in the last quarter.Analyst Comment“The order value really pops out, what is impressive amid the trade war and negative impact on electronics,” InsingerGilissen Bankiers analyst Jos Versteeg said by phone, “Such a strong growth does show how confident chip manufacturers are and that they do not want to miss the boat. I think the build-up to 5G leads to a considerable demand for semiconductors.”Know MoreThird-quarter sales came in at 2.99 billion euros, slightly below the average estimate of 3.01 billion euros. In the quarter, ASML shipped seven EUV systems, three of which were NXE:3400C, the higher productivity model.ASML newest machines, called extreme ultraviolet lithography systems or EUV, etch smaller circuits while increasing capacity and speed. EUV machines, about the size of a bus, cost more than 100 million euros each. ASML earns the bulk of its revenue in Asia.ASML models an annual revenue opportunity of 13 billion euros in 2020 and an annual revenue of between 15 billion euros and 24 billion euros through 2025, based on its positive view of technology drivers such as 5G communications, automotive, artificial intelligence and data centers. CEO Wennink said in the statement he continues to see 2019 as a growth year.What Bloomberg Intelligence says:Greater exposure to chip lithography equipment could help ASML achieve strong sales growth from 2020 onward, although sales and profit may temporarily drop in 2019. ASML is well-positioned as the only maker of extreme ultraviolet lithography (EUV) machines, for the next generation of chips for AI and 5G.(Updates with shares, analyst comment.)To contact the reporter on this story: Ellen Proper in Amsterdam at email@example.comTo contact the editors responsible for this story: Giles Turner at firstname.lastname@example.org, Edwin ChanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Google’s latest smartphone demonstrates how artificial intelligence and software can enhance a camera’s capabilities, one of the most important selling points of any mobile device.The Pixel 4, the latest entrant in a phone line defined by its cameras, touts an upgraded ability to zoom in when shooting photos as its biggest upgrade. But the Alphabet Inc. company isn’t going about it the way that Samsung Electronics Co., Huawei Technologies Co. or Apple Inc. have done -- instead of adding multiple cameras with complicated optics, Google has opted for a single extra lens that relies on AI and processing to fill in the quality gap.In place of the usual spec barrage, Google prefers to talk about a “software-defined camera,” Isaac Reynolds, product manager on the company’s Pixel team, said in an interview. The device should be judged by the end-product, he argued, which Google claims is a 3x digital zoom that matches the quality of optical zoom from multi-lens arrays. The Pixel 4 has two lenses with a magnification factor between them that’s less than 2x, and the tech that extends that useful range is almost entirely software.The success of the Pixel’s camera is instrumental to Google’s broader ambitions: it drives Google Photos adoption, provides more fodder for Google’s image libraries, and helps create better experiences with augmented-reality applications -- such as this year’s new on-screen walking directions in Google Maps.Google’s IPhone Retort: More Cameras and AI in New Pixel PhonesSuper Res Zoom, a feature Google launched last year, uses the slight hand movements of a photographer when capturing a shot -- usually a hurdle to creating crisp images -- as an advantage in crafting an image that’s sharper than it otherwise would be. The camera shoots a burst of quick takes, each one from a slightly different position because of the camera shake, then combines them into a single image. It’s an algorithmic trick that lets Google collect more information from imaging hardware, and potentially also a moat against any rivals trying to copy Google -- because others can’t just buy the same imaging sensors and replicate the results.To augment its reliance on AI and machine-learning tasks, Google has designed and added its own Pixel Neural Core chip for the Pixel 4 lineup. It accelerates the machine-learning speed of the device and, again, is intended to differentiate Google’s offering from other Android smartphones on the market with a Qualcomm Snapdragon processor at its core.The other major tool in Google’s AI kit is called RAISR, or Rapid and Accurate Image Super Resolution, which trains AI on vast libraries of images so it can more effectively enhance the resolution of images. The system is taught to recognize particular patterns, edges and visual features, so that when it detects them in lower-quality shots, it knows how to improve them. That’s key to creating zoom with “a lot smoother quality degradation,” as Reynolds put it. With more than a billion Google Photos users, the U.S. company has a massive supply of images to train its software on.Among the other features that Google offers with the Pixel 4 is the ability to identify the faces of people that a user photographs most often and ensure that they’re prioritized when capturing new snapshots -- making sure the camera focuses on them and that their eyes aren’t closed, for instance. That use of software technology has defined Google’s devices to date and is also evident in the way Facebook Inc., Amazon.com Inc. and Apple aim to employ their own AI systems.To contact the reporter on this story: Vlad Savov in Tokyo at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- South America controls about 70% of the world’s reserves of lithium, the metal used in rechargeable batteries for mobile phones and electric vehicles, but none of the infrastructure needed to put it to work.Lithium refining and battery-assembling facilities could help kick start industries in economies that are largely dependent on commodities for revenue, putting them at risk from sharp price swings. But so far, public and private initiatives in Argentina, Bolivia, Brazil and Chile have failed to deliver even a single lithium cell factory. And none are set to be built through 2025.Chile, the world’s second-largest lithium producer behind Australia, offers perhaps the best example of an effort gone off track. A $285 million lithium-cell project by two Korea-based companies was canceled in June when plunging lithium prices undercut government incentives on the metal. Meanwhile, a local company that assembles batteries using components from abroad is struggling to get lithium cells to support their sales in Chile.“The size of the opportunity is huge,” said James Ellis, the head of Latin America research at BloombergNEF. “It makes sense to try to move up the value chain. But when you look at what’s planned globally, there are no battery manufacturing assets in Latin America.”Other countries in the region face their own challenges. Here’s a breakdown:ArgentinaThe third-largest lithium producer also saw a state-sponsored initiative stall.Last year, Italy’s Seri Industrial SpA formed a joint venture with state-owned JEMSE, or more formally the Jujuy Energy and Mining State Society. The plan was to build a plant to make lithium cathodes and cells, and assemble battery parts, using raw lithium mined in Argentina’s Jujuy province.But Argentina’s economic crisis and the possibility that Peronist candidate Alberto Fernandez could win the upcoming presidential elections has, in the words of JEMSE President Carlos Oehler, “cooled all investment projects in Argentina, including building a battery factory.”The land and permits are ready, Oehler said, “and we were starting to look for financing, but the project is frozen now.”BrazilIn Latin America’s biggest economy, former Tesla Inc. executive Marco Krapels and former SunEdison Inc. executive Peter Conklin founded MicroPower-Comerc with the initial goal of providing rechargeable batteries to commercial and industrial facilities. But Brazil offers almost no government subsidies for renewable energy, and import taxes add about 65% to the cost of the batteries.That’s driven the company, which is backed by Siemens AG, to consider buying components abroad and assembling them in Brazil as a way to lower their costs.While the nation’s market for big batteries barely exists, Krapels sees opportunity in a place with an occasionally unstable power grid and a robust market for wind and solar. “This is not for the faint of heart,” he said in an interview last month. “But I think there’s an advantage on being the first to move into a market.”BoliviaBolivia hasn’t managed to produce significant volumes of lithium or lithium products. But it is home to the world’s largest salt flat, covering 6,437 kilometers (4,000 square miles), and holding more than 15% of the world’s unmined lithium resources.A pilot plant run by state-owned Yacimientos de Litio Bolivianos, or YLB, produced close to 250 tons of lithium carbonate in 2018, and the country’s goal is to generate 150,000 tons within five years, partnered with German and Chinese companies. If it succeeds, Bolivia would become one of the top-producing nations.Last month, Industrias Quantum Motors SA began sales of the first car ever built in the country, an electric vehicle that answered President Evo Morales’s once-cited wish to see a lithium-powered car “made in Bolivia.”The problem? Eager buyers aren’t allowed to drive the cars on Bolivia highways until the government can change some existing regulations.ChileThe lithium producer tried to encourage battery companies to build factories in the country by forcing miners to sell lithium at a discount. That attracted interest from giants including Samsung SDI Co. and Posco in 2017, when lithium prices were at historic highs.But since then, prices have fallen by a third, and earlier this year the companies abandoned their plans to build.Even those embarked in less ambitious initiatives are facing hurdles. In Chile’s south, Andesvolt currently imports battery components from abroad and assembles them in the southern city of Valdivia. It supplies lithium-ion batteries for electricity companies including Enel Americas SA, which installs them as back-up power in industrial, commercial and residential facilities across the country.Andesvolt expects to produce 1,000 kilowatt-hour this year, up from 200 kilowatt-hour last year. But he is finding it so difficult to import lithium cells that he is considering building South America’s first lithium-cell factory. Dealing with the hiccups of importing the cells from China is just too much, founder and Chief Executive Officer David Ulloa said.Lithium cells are highly volatile and can explode if not handled properly, which means shipping companies are often reluctant to transport them. Even when they do, there’s no guarantee the cargo will arrive on time -- or arrive at all.“We’ve seen it all,” Ulloa said in an interview. “Once a Chinese supplier didn’t do any of the paperwork needed for Chilean customs and later offered to disguise the cargo as shoes -- we’re a serious company, we couldn’t accept that and we lost that shipment.”To contact the reporter on this story: Laura Millan Lombrana in Santiago at email@example.comTo contact the editors responsible for this story: Luzi Ann Javier at firstname.lastname@example.org, Reg Gale, Steven FrankFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Samsung Display Co. plans to spend 13.1 trillion won ($11 billion) developing and building next-generation displays, responding to a flood of supply and price pressure from fast-moving Chinese rivals.In an announcement event attended by Korean President Moon Jae-in and Samsung Electronics Co. Vice-Chairman Jay Y. Lee, the investment was presented as a move to reorganize the display industry while maintaining Samsung’s global lead and Korea’s established dominance. The government will invest about 400 billion won into next-generation displays to propel that objective, Moon said.The Samsung unit will build a quantum-dot display production line in Asan, according to a company statement, which will begin operations from 2021 with an initial monthly capacity of 30,000 panels larger than 65 inches. Production will then scale up from there, with a long-term development plan that stretches out to 2025. The investment will help create 81,000 jobs, the company added.Samsung and cross-town rival LG Display Co. are grappling with a surge of competition from Chinese suppliers such as BOE Technology Group Co., which in recent years have ramped up liquid crystal display-making capacity and are increasingly making inroads into next-generation screens. To offset a decline in margins and loss of clients, Samsung is moving forward with development of quantum-dot displays. Its stock ended Thursday largely unchanged.Samsung’s heir and de-facto leader Lee has pledged to invest for the long-term in the display business, which is one of the three main pillars -- alongside memory chips and smartphones -- in which the Korean tech champion is world leader. The company is making a huge bet on the market as the business environment deteriorates and a trade spat between Korea and Japan creates uncertainty around the supply of chemicals and components necessary to manufacture advanced displays. This week, Samsung reported a quarterly profit decline of more than 50%, though that was less of a fall than anticipated.Read more: Samsung Beats Estimates as Demand Picks Up for Note, IPhoneKorea’s largest company is the world’s foremost producer of high-margin OLED displays, but hit a snag last year when orders from Apple Inc. underwhelmed after the marquee iPhone XS fared worse than expected. It remains to be seen how enticing the new iPhone 11 Pro models will be to consumers over the critical holiday shopping season, though analysts are growing optimistic on demand.Away from displays, the unpredictability surrounding tensions between the U.S. and China -- where Samsung earns a big chunk of revenue -- has led to a downturn in the chip industry at a time when smartphone demand tapers off and the pace of data center construction decelerates.(Updates with Samsung’s shares in the fourth paragraph. An earlier version of the story corrected the timeframe for production capacity.)To contact the reporter on this story: Sohee Kim in Seoul at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Edwin Chan, Vlad SavovFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Apple Inc supplier Samsung Display said on Thursday it will invest 13.1 trillion won ($11 billion) on facilities and research to upgrade a production line, as it battles severe oversupply due to weak global demand for smartphones and TVs. The unit of Samsung Electronics Co Ltd said that by 2025 it will spend 10 trillion won on facilities and the rest on research and development to produce more advanced display screens. The investment announcement comes at a time when South Korea's panel makers have been struggling to cope with slower liquid crystal display (LCD) demand for TV and smartphones as well as rising competition from Chinese rivals and a shift by major clients to organic light emitting diode (OLED) panels.
Investing.com - South Korea-listed Samsung (KS:005930) Display will invest as much as 13.1 trillion won ($11.0 billion) on facilities and research on next-generation display technology, the country’s presidential office said on Thursday.
Samsung just announced its third-quarter guidance. The company expects an operating profit of about 7.7 trillion Korean won, or $6.43 billion.
U.S.-China trade talks are at the forefront, but investors are also monitoring the ongoing Brexit discussions and debating the degree of easing required from the Federal Reserve following the recent string of weakening U.S. activity indicators and the slowing in the labor market.
(Bloomberg) -- Samsung Electronics Co.’s de facto leader, Jay Y. Lee, plans to give up his board seat after his directorship expires late October as he prepares for another trial over alleged bribery, a person familiar with the matter said.The billionaire heir won’t seek to extend his three-year term on the board of the tech behemoth when it ends Oct. 26, but will remain at the helm of the world’s largest chip and smartphone maker, the person said, asking not to be named because of the sensitivity of the issue. Lee will instead continue to run Samsung Electronics with the title of vice chairman though its board will stay central to overall management, the person added.The 51-year-old is putting some distance between himself and Korea’s largest conglomerate ahead of a re-trial over bribery charges that could land him back in jail. He faces additional allegations in a landmark case that inflamed popular anger over the chaebols that control the country’s economy and helped bring down former president Park Geun-hye. Lee may be pre-empting a backlash over his re-seeking a board position -- which requires shareholder approval -- while contesting a months-long legal case.Read more: Samsung’s Lee Faces a Retrial That Could Put Him Back in JailWhen Lee joined the board in 2016, it was deemed a symbolic move to step out from under the shadow of his ailing father and consolidate his power over Samsung. His ascension was intended to shore up his position as a leader who drives strategic initiatives such as mergers and acquisitions.Yet months later, Lee’s fortunes reversed. Caught up in a nationwide scandal, Lee spent about a year in prison battling accusations that he offered horses and funds to a confidante of then-president Park in return for support of a 2015 merger that cemented his control over the Samsung group.Since his release in 2018, Lee has been busily re-cultivating an image as the face of successful Korean business. He joined President Moon Jae-in on visits to India and Pyongyang, and expanded his network via meetings with financier Mohammed bin Salman and Indian tycoon Mukesh Ambani.The only son of Chairman Lee Kun-hee will remain Samsung’s overseer for the time being, grappling with a laundry list of tasks including steering Samsung through a severe industry downturn. The company’s operating income fell more than 50% in the September quarter, though that was less of a decline than anticipated.As Lee has stressed in a series of press releases, the company needs to continue to invest in future businesses such as logic chips and even sixth-generation mobile networks to overcome growing uncertainty.Why Samsung’s Lee Needs to Do His Prison Time: Michael SchumanTo contact the reporter on this story: Sohee Kim in Seoul at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Samsung Electronics Co. posted earnings that handily beat analyst estimates as stronger smartphone demand offset price declines in the memory chip business.Operating income was 7.7 trillion won ($6.4 billion) in the three months ended September, compared with the 6.97 trillion won analysts had forecast, according to estimates compiled by Bloomberg. Still, that is a profit decline of more than 50% for the Suwon, South Korea-based company.Samsung, the world’s largest producer of mobile phones and smartphone displays, is benefiting from solid demand for its Note 10 and for Apple Inc.’s iPhone 11 Pro, which uses the company’s OLED displays. Yet, the memory chip business has been its most profitable and uncertainties there have lingered because of the ongoing U.S.-China trade war and Japanese restrictions on the export of materials essential for chip and display production.“It’s better-than-expected results as mobile business made a huge improvement,” said Park Sung-soon, analyst at Cape Investment & Securities.Shares rose as much as 1.4% and had climbed 23% this year through Monday’s close.Sales for the third quarter were 62 trillion won, beating the average projection compiled by Bloomberg of 61.14 trillion won. Samsung won’t provide net income or break out divisional performance until it releases final results later this month.Samsung’s new high-end smartphones, including the Galaxy Note 10 and Galaxy Fold, helped cushion profit declines in the memory business. Its display business is recovering from a slump, with strong demand for OLED displays for smartphones such as Apple’s iPhone 11.The volatile business environment due to the U.S.-China trade war and South Korea-Japan spat has fueled uncertainties and made it harder for the market to gauge demand. As Japan’s export curbs on key materials used in chips and display production kicked in early July, clients raised their inventories of memory components to minimize risk, according to a note from TrendForce on Sept 26.“The stock-up demand was stronger than expected this third quarter due to the seasonal tailwinds and the pulling forward of end product shipments ahead of a possible new round of U.S. tariff increases in December,” said TrendForce. “Consequently, the overall trend of contract prices also shifted from decline to stability during the third quarter.”Analysts raised operating profit estimates in recent weeks as dynamic random-access memory shipments improved in the third quarter. Citi estimated Samsung would report semiconductor profits slightly higher than its previous estimates, supported by a 30% increase in DRAM shipments quarter-on-quarter, despite a 20% drop in DRAM prices.Concerns over the impact on the production of chips and displays have eased among some market watchers as Japan approved shipments of key materials to Samsung. Liquid hydrogen fluoride -- a highly purified chemical used to refine chips in production -- has not been approved for shipment to South Korea so far, but multiple reports and analysts indicate a local supplier may be able to provide substitutes.“Although DRAM and NAND demand is recovering and shipments in the third quarter were quite robust, there is skepticism about the sustainability of the demand upturn,” said Sanjeev Rana, technology analyst at CLSA.With the trade war issues hanging over the tech industry, Micron Technology Inc. warned that the tensions may prolong a memory-chip industry slump and gave a disappointing profit forecast. Despite the cautious outlook, investors are growing more bullish on Samsung amid hopes for an end to the slide.“As inventory de-stocking cycles end at major customers, we expect the memory industry to enter a recovery stage in 2020, while the magnitude of recovery will be more gradual (especially for DRAM) relative to previous upturn cycles,” J.P. Morgan said in an Oct 3 note.In the third quarter, contract prices for 32-gigabyte DRAM server modules fell 13.8% compared to the previous quarter while those for 128 gigabit MLC NAND flash memory chips rose 12.3%, according to inSpectrum Tech Inc.(Updates with analyst comment in fourth paragraph.)To contact the reporter on this story: Sohee Kim in Seoul at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Strong sales of Samsung Electronics' Galaxy Note 10 smartphone series are limiting forecast profit falls at the South Korean tech giant, raising hopes it is getting back on a growth track after years of moribund sales. Samsung, the world's largest smartphone maker, is powering ahead with the launch of 5G phones and $2,000 foldable handsets as it heats up competition with rivals U.S. Apple and China's Huawei [HWT.UL] following a battery explosion scandal in 2017 that hurt sales. There are also early signs that the global memory chip business, a key driver of Samsung's profit, will stabilise next year after prices were eroded by a weak global economy and slower spending by key data centre customers.
Investing.com - Shares of the South Korea-listed index heavyweight Samsung Electronics Co Ltd (KS:005930) traded higher on Tuesday in Asia even after the company said its operating profit in the third quarter fell by more than 50% from a year ago.
Oct.16 -- Robert Maire, president of consulting firm Semiconductor Advisors, talks about Taiwan Semiconductor Manufacturing Co., which is scheduled to report its results on Thursday, and Samsung Electronics Co. He speaks with Shery Ahn and Haidi Stroud-Watts on "Bloomberg Daybreak: Australia."
It's known as the world's biggest maker of smartphones. But Samsung's business goes a lot further than fancy handsets - and so do its problems. The South Korean giant gave a trading update update Tuesday (October 8). It says operating profit will tumble 56 percent in the third quarter. That's actually better than forecast. But chips remain a big problem. Prices for semiconductors have tumbled amid weak demand. They fell around 25% in the first quarter of this year. Though analysts see signs that things are at least getting less bad. While chip prices are still falling, the percentage decline is forecast to slow to single digits in early 2020. Meanwhile, Samsung's mobile phone business is looking a whole lot happier. The firm says its new Galaxy 10 smartphones are selling strongly, and it has 5G and folding handsets hitting the market. Rival Huawei has inadvertently lent a hand. Its sales have stumbled following the imposition of U.S. sanctions. They may prevent it selling phones fitted with Google apps. Samsung is all too happy to mop up any consumers now hesitant about the Chinese brand.
Oct.07 -- Mark Newman, senior research analyst at Sanford C. Bernstein, talks about Samsung Electronics Co.'s financial results and outlook. Samsung posted earnings that handily beat analyst estimates as stronger smartphone demand offset price declines in the memory chip business. Newman speaks with David Ingles and Yvonne Man on "Bloomberg Markets: Asia."