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Samsung loss adds economic gloom | Samsung loss adds economic gloom |
(about 1 hour later) | |
Samsung Electronics, the world's biggest chip-maker, has recorded its first ever quarterly loss. | |
Prices of the South Korean firm's core products - memory chips and liquid crystal displays (LCDs) - have plunged alongside global demand. | Prices of the South Korean firm's core products - memory chips and liquid crystal displays (LCDs) - have plunged alongside global demand. |
Samsung's loss follows a profit warning from Japan's electronics giant Sony and other tech firms Microsoft and Nokia. | |
On the last day of trading before many Asian countries close for the Chinese New Year, markets slid downwards. | On the last day of trading before many Asian countries close for the Chinese New Year, markets slid downwards. |
Japan's Nikkei index fell 2.8% by midday on Friday, as concerns about Asia's ability to weather the global economic downturn intensified. | |
Samsung slips | Samsung slips |
Samsung on Friday posted an October-December net loss of 22.2bn won ($16.2m; £11.6m), compared with profits of 2.21 trillion won a year ago. | |
The losses are the first since it started to report quarterly figures in 2000. | |
Sales actually rose slightly, but margins on products such as plasma displays and mobile phones have been falling. | |
"The global economic slowdown had an adverse effect on consumer purchases of electronics goods in the fourth quarter, traditionally a strong period for electronics companies," Samsung said in a statement. | "The global economic slowdown had an adverse effect on consumer purchases of electronics goods in the fourth quarter, traditionally a strong period for electronics companies," Samsung said in a statement. |
Samsung accounts for about 20% of South Korea's annual exports - it is the world's largest manufacturer of flat screen televisions, memory chips and liquid crystal displays; it ranks second in mobile phones after Nokia. | Samsung accounts for about 20% of South Korea's annual exports - it is the world's largest manufacturer of flat screen televisions, memory chips and liquid crystal displays; it ranks second in mobile phones after Nokia. |
It employs 150,000 people in 62 countries and is engaged in a huge reshuffle of top executives. | |
It forecast slow progress in the semiconductor and display sectors as spending contracts worldwide, but expects its telecoms business to perform strongly. | It forecast slow progress in the semiconductor and display sectors as spending contracts worldwide, but expects its telecoms business to perform strongly. |
Chill windsGlobal appetite for China's exports is drying up | Chill windsGlobal appetite for China's exports is drying up |
The gloomy corporate news came a day after China announced its lowest rate of growth in seven years. | The gloomy corporate news came a day after China announced its lowest rate of growth in seven years. |
South Korea said its economy shrank by 3.4% at year's end, while Japan reported exports plummeted a record 35% last month and Japan's central bank predicted at least two years of contraction ahead. | South Korea said its economy shrank by 3.4% at year's end, while Japan reported exports plummeted a record 35% last month and Japan's central bank predicted at least two years of contraction ahead. |
Singapore unveiled a $13.7bn (£9.9bn) "resilience package" on Thursday to provide a welfare net for residents, sustain employment and help the country cope with an expected 5% contraction in its economy. | Singapore unveiled a $13.7bn (£9.9bn) "resilience package" on Thursday to provide a welfare net for residents, sustain employment and help the country cope with an expected 5% contraction in its economy. |
Malaysia also said it would ban the hiring of foreign workers, to support its own people in work. | Malaysia also said it would ban the hiring of foreign workers, to support its own people in work. |
Sony said it expected to make an annual operating loss of nearly $3bn, its first deficit for 14 years, thanks to a sharp increase in the value of the yen and weak sales. | Sony said it expected to make an annual operating loss of nearly $3bn, its first deficit for 14 years, thanks to a sharp increase in the value of the yen and weak sales. |
The US Treasury secretary-designate Tim Geithner's comments, describing China as a "currency manipulator" will add to a sense of economic chill in the region, analysts said. | The US Treasury secretary-designate Tim Geithner's comments, describing China as a "currency manipulator" will add to a sense of economic chill in the region, analysts said. |
"President Obama - backed by the conclusions of a broad range of economists - believes that China is manipulating its currency," Mr Geithner said in written testimony to senators. | "President Obama - backed by the conclusions of a broad range of economists - believes that China is manipulating its currency," Mr Geithner said in written testimony to senators. |
Mr Obama has pledged to "use aggressively all the diplomatic avenues open to him to seek change in China's currency practices," Mr Geithner said. | Mr Obama has pledged to "use aggressively all the diplomatic avenues open to him to seek change in China's currency practices," Mr Geithner said. |
Use of the loaded term of manipulator could spark friction between two of the world's most important trade partners, China and the US, analysts said. | Use of the loaded term of manipulator could spark friction between two of the world's most important trade partners, China and the US, analysts said. |
However, China has overtaken Japan as America's biggest foreign creditor, and as of October 2008 held $652.9bn in US Treasury bonds, according to the latest Treasury Department figures. | However, China has overtaken Japan as America's biggest foreign creditor, and as of October 2008 held $652.9bn in US Treasury bonds, according to the latest Treasury Department figures. |