Sharjah24 - Reuters: Samsung Electronics Co Ltd cautioned chip demand from smartphone and PC makers would weaken further as people shop less, and that the more resilient demand from server clients may also see adjustments amid recession worries.
While the world's top maker of memory chips and smartphones turned in its best April-June operating profit since 2018 on strong server chip demand, it said its mobile business saw profits weakening amid geopolitical issues, inflation concerns, and higher components and logistics costs.
"Server (chip demand) is less affected by macro issues... But if global recession occurs, server clients will also have to adjust their inventory," Jin-man Han, executive vice president at Samsung's memory chip business, said on a conference call.
"Due to high uncertainty, we are updating our forecast constantly," he added.
Earlier, San Diego-based Qualcomm Inc warned of a hit to fourth-quarter sales from cooling smartphone demand, adding to the chorus of voices cautioning about chip sales as red-hot inflation squeezes consumer spending.
Also, the Ukraine crisis and COVID-19 lockdowns in China, the world's biggest smartphone market, have worsened supply-chain snags, forcing many phone makers to cut orders for chips.