SEOUL -(Dow Jones)- Samsung Electronics Co. (005930.SE) said Friday it expects intensified competition and increased supply will pose a "challenge" to its efforts to maintain its profitability in the current quarter.
"With intensified competition throughout the digital media and mobile industries going forward, it may become a challenge to maintain current profitability levels," Robert Yi, vice president of Samsung's investor relations team, said in a statement.
Samsung said strong seasonal demand for components will drive its earnings in the third quarter, but increased market supply and continued price competition in its television set businesses will likely put downward pressure on its profit margins.
The electronics giant said demand for dynamic random access memory chips will remain strong in the third quarter on typically high seasonality, while demand for NAND flash memory chips will rise on the growing popularity of new handheld devices, such as smartphones and tablet computers.
However, demand for flat-screen panels will remain flat on increased inventory, it said.
In the April-June period, Samsung' operating profit margin in the semiconductor business was 30.8%, while its LCD business margin was at 11.3%. The operating profit margin in the telecom division was 7.2% and 2.5% in the digital media division, it said.
Samsung Electronics is the world's largest maker by revenue of TV sets, memory chips for computers and other digital gadgets.
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