August 5, 2014
Last month, Samsung posted a 25 percent drop in operating profits due to declining smartphone demand and increased competition in China and Europe. This isn’t the only area where the South Korean electronics giant is struggling, according to The Wall Street Journal. Less than a year ago, Samsung was Apple’s only provider of microprocessors for iPhones and tablets. That is no longer the case as Cupertino has turned to Taiwan Semiconductor Manufacturing (TSMC) to provide “A8” chips for its 2014 mobile devices. At least in the short term, this is bad news for Samsung, According to Robert Yi, Samsung’s head of investor relations “Sales and profitability from System LSI (logic chip business) worsened as demand from main customers continued to decline.” Sales of Samsung’s own line of mobile processor chips, the Exynos line, are also struggling. “Even for Galaxy smartphones, the Exynos chips aren’t a very popular choice, analysts say,” according to the report. In the near-term, Samsung hopes to counter the expected challenges by focusing on improving profitability by expanding sales of other system chips, like image sensors. The company will also work on implementing a cost reduction plan. As for Samsung's supplier relationship with Apple, things could improve in 2015. Last month, Reuters said that Apple is likely to call on the South Korean company for the production of its 2015 A-series chips. Those would be the chips used on the "iPhone 7" and 2015 iPads. See also: New Samsung ad mocks users waiting for the larger screen of the 'iPhone 6,' Samsung Calls iPhone Users 'Wall Huggers' In New Ad, and Apple is no longer seeking a permanent injunction in Samsung lawsuit.