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Is Samsung benefiting from US sanctions on Chinese smartphone maker Huawei?

 

Samsung Electronics has a record revenue of 59 59 billion in the third quarter of this year.


A major reason for this revenue is the 50% increase in sales of smartphones while the profit from microchips has been 82%.


The South Korean-based technology company posted a net profit of 8. 8.3 billion in the third quarter of the year. The company has earned 49% more profit than the same period last year.


It is believed that US sanctions on Chinese company Huawei have benefited Samsung's mobile and chip business.



The growing sales of Samsung's products reflect the fact that the company is also gaining a share of Huawei's market share. Because of the US sanctions, the Chinese company can no longer sell its smartphones and other items in many places.


But the Chinese company had already stockpiled key chips before US sanctions were imposed, which enabled it to introduce a new phone that it said was better than the new iPhone model.


In August, the US Department of Commerce said it would ban any foreign company that sold chips to Huawei without a license.


The Trump administration has targeted a number of Chinese technology companies on the basis of national security, including Huawei, TickTalk and WeChat.


Sales of Samsung's state-of-the-art TV and other home appliances have also picked up from July to September.


The growing business of chips


According to experts, a positive development for Samsung's business is that it has established contacts with major companies in the chips industry in the United States.


Microchips are used in many modern things, such as home appliances, smartphones and other electronics. They are widely used for data centers and commercial infrastructure.


Wawe has introduced its new Mate 40 smartphone, which the company claims has a better processor than Apple's new iPhone 12.


Chip maker AMD says it is buying rival Xylons for 35 35 billion. Last month, graphics chip maker Nvidia struck a deal with Softbank to buy British company Arm for 40 40 billion.


Following these agreements, the stock market has seen a sharp rise in the value of shares of both AMD and Nvidia and people are showing interest in investing in them.


Some experts believe that given the US industry, the Chinese government will now promote investment in microchip technology.


"It can accelerate research and development," said Natasha Qassam of the Lowe's Institute. That's clear from what we're seeing. "


Code 19 Performance in Crisis


Despite the global epidemic and crisis of Code 19, chip companies have performed well. During this time, working from home was preferred to office work and the demand for certain types of chips increased.


In addition to Samsung, Korean company SK Hanks also reported profit in the second quarter. This is at a time when sanctions have been imposed around the world to prevent corona.



US-based Micron Technology also reported higher-than-expected profits in its quarterly report. He predicted a loss in the context of Work From Home in June.


However, Samsung is aware of the difficult situation in the future and said that the profit may decline in the last quarter. The company says demand for the chip from server users could decline and competition in other electronics items, including mobile phones, could increase.


Samsung's future and leadership change


Samsung's third-quarter report comes just days after former chairman Li Keqiang was buried. He was instrumental in taking the company to the global level.


Much can change with his death. These heirs may be pressured to sell the company's assets or pay a hefty tax on the inheritance.


Samsung's command is being handed over to Lee Jae-young, who has emerged as the successor and has been in charge of the technology company since 2014.


He has twice been charged with irregularities in the 2015 merger agreement and is due to stand trial.


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