Don't expect memory prices to rise any time soon. Samsung announced yesterday that its Q3 2019 operating profits fell 56% year-over-year. The company expects demand for its memory products to improve in Q4, but if the last year is any indication, supply will continue to be too high to support price bumps.
Samsung said in its earnings report that it brought in an operating profit of 7.78 trillion Korean won ($6.7 billion) in Q3 2019, compared to 17.57 trillion won ($15 billion) in Q3 2018 . Analysts told CNBC that much of this decline can be attributed to weak demand for the company's smartphones and its memory products. Many of Samsung's memory products are used in phones, so that market's challenges affect Samsung in multiple ways.
This has become normal for Samsung. The company said its operating profits fell 60% in Q1, 55.6% in Q2 and now 56% in the third quarter compared to the same financial quarters in 2018. Samsung has blamed its lower profits on dwindling smartphone and memory demand every single quarter.
Samsung isn't alone here. The memory market at large has struggled throughout 2019 despite efforts to keep supply and demand in check by reducing production. Even unexpected obstacles, like a power outage at Toshiba's plant and Japan's export restrictions on critical materials, haven't been enough to slow the falling prices. Memory companies simply can't currently expect the profits they once enjoyed.
